Liquefied Natural Gas Ship Route Planning Model Considering Market Trend Change

Abstract

We consider a new biannual liquefied natural gas (LNG) ship routing and scheduling problem and a stochastic extension under boil-off gas (BOG) uncertainty while serving geographically dispersed multiple customers using a fleet of heterogeneous vessels. We are motivated not only by contract trend changes to shorter ones but also by technological advancesin LNG vessel design. The mutual coincidence of both transitions enables developing a new LNG shipping strategy to keep up with emerging market trend. We fi rst propose a deterministic LNG scheduling model formulated as a multiple vehicle routing problem (VRP). The model is then extended to consider BOG using a two-stage stochastic modeling approach in which BOG is a random variable. Since the VRP is typically a combinatorial optimization problem, its stochastic extension is much harder to solve. In order to overcome this computational burden, a Monte Carlo sampling optimization is used to reduce the number of scenarios in the stochastic model while ensuring ggood quality of solutions. The solutions are evaluated using expected value of perfect information (EVPI) and value of stochastic solution (VSS). The result shows that our proposed model yields more stable solutions than the deterministic model. The study was made possible by the NPRP award [NPRP 4-1249-2-492] from the Qatar National Research Fund (a member of the Qatar Foundation).