It is not uncommon to face a situation when we need to make capital investment decisions to increase transportation capacity of a pipeline under uncertainties such as market development, project costs, schedule and so forth. This was the situation we faced related to the energy shortage in Brazil that prompted for the need of alternative and reliable energy sources that could be put into operation in a short period of time based on many prospective Gas Fired Power Plant projects but without having the necessary agreements signed. The Ministry of Mines and Energy of Brazil set a program addressing initially 53 thermo power plants totaling about 19,363 MW. From this total 17,577 MW of installed power was from 47 gas fired power plants demanding gas volumes in the range of 88 MMm3/d, most of this power was to be available from 2001 to 2003. With this challenge, Petrobras has started to design a gas pipeline network expansion plan with investments of more than 1 billion US$ for its system alone, including new gas pipelines, new compressor and custody transfer stations and loop lines, in addition to expansion projects for the Bolivia-Brazil Gas Pipeline in Bolivia (0.2 billion US$) and in Brazil (0.35 billion US$), and the new gas pipeline from Argentina to Brazil (0.25 billion US$). Under this scenario we considered the option of contracting compression service for some pipelines in our networks as an alternative for conventional and fixed compressor stations while discussing the gas and transportation contracts and others investments. We did a feasibility analysis for two alternatives of compression service contract and fixed compressor station, both using Monte Carlo Simulation Method. The results and methodology are presented in this paper.
Petrobras Gas Pipeline Expansion Project has faced a challenging situation: How to get prepared for a very high growth scenario in demand related to the program of The Ministry of Mines and Energy of Brazil that addressed the installation of 53 thermo power plants totaling about 19,363 MW. From this total, 47 gas-fired power plants - GFPP totaling 17,577 MW, demanded gas volumes in the range of 88 MMm3/d that would more than double the installed gas pipeline transportation capacity since most of this power were to be available from 2001 to 2003. By the end of 2002, 4.6 GW of GFPP was already installed. The energy shortage in Brazil prompted for the need of alternative and reliable energy sources that could be put into operation in a short period of time based on many prospective Gas Fired Power Plant projects but without having the necessary agreements signed.
