Stochastic LNG facility

location problem
Prof. dr. Iris F.A. Vis
Joint work with dr. Evrim Ursavas and dr. ir. Paul Buijs

Stichting Ubbo Emmius Fonds

2

LNG in the logistics sector

Emissions:

2015: New SECAs in North and Baltic Sea area.

Possible new legislation on CO2 emissions

Costs and sound reductions:

Lower fuel costs in relation to potentially higher investments

More flexibility in deliveries.

Distribution Network:

Chicken and the egg problem: Transition towards LNG will only
be made if a supply network is in place.
Transport of LNG by logistics sector to third parties by means
of different modes
Usage of LNG by different modes for transport operations by
the transport and maritime sector
3

Short term goals

Investments

Replacement of current truck and ship fleet

Building bunker facilities and fuel stations
Production of bio LNG.

Green deal goals to be reached in 2015

At least 50 sea vessels, 50 barges, 500 trucks

Ambition in EU to meet needs

More than 180 road LNG stations in EU

More than 40 small-scale LNG terminal
Medium-size terminals, tank-trucks and bunker vessels

Project overview
LNG as a sustainable fuel needs a sustinable design
and usage of its distribution network

Focus on well-to-wheel sustainability improvement

Goals

Design of alternative designs for multi-modal LNG

infrastructure
Providing insights in infrastructural demands for various
phases in introduction of LNG
Simulating alternative infrastructural design
Design of planning tools for distribution and supply of LNG
facilities

Inland waterway shipping

Still few vessels sail on LNG
Current situation: mainly trucks delivering LNG to
vessels somewhere along their route

Bunker configurations
1.
2.
3.
4.

Terminal/Pipeline to Ship Transfer (PTS)

Truck to Ship Transfer (TTS)
Ship to Ship Transfer (STS)
Portable Containerized Transfer

Only options 2
and 3 are
studied in
the Dinalog
project
7

Decision problems
Configuration?
(one or multiple)
Capacity?
Location?
New study:
location models
for Terminal/
Pipeline to Ship
Transfer (PTS)

Terminal/Pipeline to Ship
The location of facilities is limited
Demand for fuel can be seen as a traffic flow that
passes by a facility
Customers prefer to bunker either at their origin or
destination point.
Uncertainty in future freight flows (vessel routes)
LNG demand is stochastic, depending on a phased
introduction of infrastructure and expected to grow
in the future.
The design of the tank and the exact composition of
LNG determine the amount of boil-off gas during
transportation and storage.
9

Input
(future) freight movement (vessel routes)
Vessel types
Current and future demand for LNG
Maturity of network
Geographical restrictions
Safety regulations

10

Approaches
Two approaches:

Static approach: The waterways will be assessed individually

considering each location as a potential alternative
Zoning approach: Groups of waterways will be evaluated.
This implies a two-step approach where groups are initially
formed at which afterwards locations within are determined.

We study networks with flow capturing locations

and the natural distinction between land and
waterway transportation.

11

Classification of the
problem
Classification

Problem characteristics

Continuous

Boil-off rate increases if the level of

LNG decreases
parameter values will change over
time

Capacitated

Size and storage volume at each

facility can be different

Multi-period

Boil-off effect (0.1-0.5% of the total

volume of LNG )
Growth in demand over time

Multi-layer

Static facilities and mobile facilities

serving flow of multiple modes of
transportation

Single commodity

LNG

Stochastic demand

Demand and demand

characteristics differ per mode of
transportation

12

Conclusions
Inland waterway shipping will increasingly play a
key role in sustainable transportation
LNG as a promising alternative to classical fuels
The required fuel infrastructure for a phased
introduction of LNG must carefully be studied.
New models incorporating LNG specific
characteristics and complexities are needed.
Scenario studies can be performed to test impact of

Demand growth
Uncertainty in freight flows
Performance of different bunkering methods under different
settings and scenarios?
13