A gas field optimization model using linear programming (LP) was developed to maximize the cashflow of a multi pool gas field system. The model (OPTO) uses a production module and an economics module linked to an optimization routine. The two modules set up a series of linear equations which are then solved by a commercial LP package using the simplex algorithm, The model output is an annual production schedule which will maximize cashflow while considering the system's characteristics and constraints as well as product prices, fixed and variable operating costs, royalties and taxes.
Detailed derivation of the linear equations is described in an APPENDIX A.
The process of generating a production forecast for a gas field is well known in the oil and gas industry, Numerous computer program models to forecast gas production are widely available within the industry. These forecasting models may use decline analysis, use an analytical technique, or use a full nodal system of pools, pipeline network, production facilities, and contract demand.
The results of these existing models do not accurately represent the optimum operating strategy because they do not consider important parameters like operating costs, prices, royalties and taxes. As a result these models generate operating strategies which are often sub-optimal.
Optimizing the available resources is an important aspect when pipeline and processing flow constraints are present, and product prices and demand vary significantly. Resource optimization can be achieved by adjusting the operating strategy of a field until a desired objective (i.e. maximize net cashflow) is achieved. By defining an objective and constraints as a set of linear equations and solving these, an optimal forecast can be generated that maximizes the resources.
Linear programming (LP) is a mathematical technique to optimize a complex system of variables (i.e. pool production) when the system can be expressed as a series of linear (or approximately linear) equations.
A new model was developed which optimizes the available resources and considers the processing flow constraints. Included in the formulation of the model are: fixed operating costs, processing costs, royalties, and taxes. sing this model, critical constraints can be identified, and capital investments investigated to eliminate these constraints. Most importantly, the model can be used to determine a short- and long-term operating strategy to maximize net cashflow.
This paper describes the implementation of linear programming in the development of a new forecast model to optimize resources for a system of pools, field and central processing facilities, and multiple gas contracts. See FIGURE 1 for a generic system configuration. An example with results is included. The fullderivation of the LP equations are presented in the Appendices.
Generating a gas forecast for a system of gas pools with different gas contracts is not an easy task. Many factors must be considered: declining deliverability, varying product demand and prices, and limited facility capacities to process the products.
To simulate production from a multi-pool field, a forecasting procedure is typically developed whereby the pools produce at a constant rate for a fixed time (i.e. a year or a quarter of a year) after which the conditions of each pool is updated.