This is the first of a series of papers describing the application of simulation-optimization methods coupled with an economic model to "Virtual Gas Pipelines". Virtual Gas Pipelines consist in transporting compressed (CNG) or liquefied natural gas (LNG) in tanks to remote locations.

In this paper we apply the use of a Virtual Gas Pipeline to a CNG system (compressed natural gas systems). This system is composed by a mother station (compression station with truck upload) with "n" satellite stations (delivery points). The results presented here illustrate the potential in cost-effectiveness that can be made by employing logistics simulation as the foundation for a wide-ranging search for solutions to gas transportation problems.

Two models are developed for a virtual CNG pipelines: a simulation model and an economic model to represent the process of transporting using of trucks. These models are integrated.

A field application case is detailed for CNG for vehicular use (NGV) with many NGV sale stations. Important optimization aspects are discussed such as mother station size, location, gas load distribution, number of loads, truck use and others. Economics aspects are also discussed specially presenting cutoff parameters for determining the application of Virtual Pipelines. Service level efficiency and also business profitability are two key elements of this integrated analysis

This methodology can be adapted for the use of other technologies to a Virtual Gas Pipeline System. These new technologies can be another gas transformation method such as liquefaction (LNG) or another gas transportation system such as shipping (barges).

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