The following exercise envisions the use of a hypothetical CAS based tool, called Transform/Interstate, in the tactical configuration of interstate natural gas pipeline schedules given a set of receipt and delivery objectives.

TARGET CUSOMER SCENARIO EXERCISE

“Transform/Interstate”

User: Natural Gas Transmission System Scheduler
Technical Buyer: IT Department, Pipeline Systems Software Manager
Economic Buyer: VP, Natural GasTransmission

Before:

Situation: Operational alternatives and transmission contract performance criteria in interstate natural gas transmission are tightly controlled by federal regulations. Operators are restrained by regulation from participation in the ownership of the commodity, natural gas, which was traditionally used by pipeline operators as a buffer against the economics of the operation of the transmission network. Under the current regulations, operators are able to “create margin” only through the reduction in operating costs against a fixed, rate based, revenue stream from the sale of transmission capacity.

Desired Outcome: Many operators have a pipeline system which is “networked” in the sense that there are parallel pipeline segments, networks of pipeline in and out of receipt, delivery and transmission stations on the pipeline, and operational alternatives as to the pressure, volume and even direction of flow of the natural gas. There exists a very short window of opportunity to exercise options in the configuration of the pipeline after nominations for a particular production period have closed, and the specific demands of receipt, delivery and transmission of natural gas at each point on the system are known, which may result in significantly better economic performance against the contractual obligations. Understanding the net obligations on the system for the scheduling period, quickly identifying the alternative configurations that will satisfy that demand, choosing a configuration that will minimize the cost of operation for the system for the period, and making the necessary operational changes in the system prior to the schedule period would result in the best economic result from the system. Additionally, when operational interruptions occur within the schedule timeframe, the ability to quickly configure the next best operational schedule within the light of it's economic consequence, would be even more significant in overall profitability.

Interfering Factors: While operational status of the pipeline is available in a continuous stream from SCADA applications controlling the pipeline, the system is in motion, and cannot be abruptly altered without considerable preparation and coordination of operational personnel and equipment. The net operational requirement for the period is derived from the pipeline nominations system at the close of the nominations process and must be communicated to the scheduling personnel after the close. Identifying the operational alternatives and evaluating the economic consequence of what could be many thousands of alternatives is a process that must be automated in order to have any chance of being of value within the desired timeframe. Current optimization technology is very efficient in the optimization of the system for operational efficiency, but does not consider the economic consequence of the alternatives in the evaluation. The introduction of unanticipated operational changes during the schedule period can be particularly troublesome, causing domino effects in the rest of the system and a general degradation of operational efficiency and therefore economic performance.

Economic Consequences: The opportunity of this “just in time” economic optimization of the system cannot be expected to render more that a few percentage points difference in the results, but, due to the fixed nature of the revenue stream may be the only opportunity for creating additional margin on the operation of the system. The best net economic response to operational interruptions can have a very dramatic impact on recovering not only the operational stability of the system, but the economic performance, as well. Also, due to the magnitude of the operating budget of a large pipeline system, the raw numbers involved in a minor percentage change could be very significant in terms of overall company performance.

After:

New Approach: Transform/Interstate (T/I) is a real time decision support system which interfaces with pipeline operations and back office systems to access all of the data necessary to evaluate pipeline short term configuration options within the context of their economic consequence. Utilizing state of the art optimization techniques derived from the study of natural evolutionary systems T/I offers the pipeline scheduling function the opportunity to take advantage of last minute changes in pipeline operations which would result in significant economic benefit.

Enabling Factors: Integrated data access is the enabling technology of T/I. The ability to see all contributing factors, to understand and catalog the nature and relationships of all factors is a key component of the system. Multi-objective optimization is the enabling science of T/I. Using new science which has come out of the study of natural systems, T/I is able to “search the landscape” of solutions to the problem in new and dramatically more effective ways than in previous generations of optimization software.

Economic Rewards: The first benefit of T/I is its ability to consider all of the operational configuration options and their economic consequences quickly enough for the recommendation to be acted upon within the necessary timeframes. This initial advantage is compounded during the scheduled transmission period by the systems ability to quickly assimilate changes in the schedule, react to the consequences of the changes, and issue new directives to adjust for the changes. It is a particular property of the new science to be most effective in a networked landscape of solutions where there are many and frequent interruptions to the scheduled events, just such an environment as a natural gas transmission system. The system solves for production efficiency as well as economic result, so the net solution at the end of the scheduled period is superior in both categories.