Planning natural gas networks and storage in emerging countries – an application to Brazil

Abstract

Some emerging countries, such as Brazil, have large remaining natural gas resources but relatively poor infrastructure to monetize it. When most of the natural gas extraction derives from associated gas, this results in high reinjection rates in production fields combined with fuel imports also to deal with an increasingly variable demand. This study test the hypothesis that modeling the natural gas transportation network expansion with Underground gas Storage (UGS) is crucial, as UGS can reduce transportation costs by better fitting natural gas supply and demand. Without UGS chances are that network expansion will be based in oversized pipelines, or pipelines often challenged by peaking demands. Therefore, this study emulated a real natural gas transport network in a thermo-hydraulic model, aiming at diagnosing its bottlenecks mainly caused by demand intermittency, and pointing out infrastructure solutions. Findings indicated the design of UGS associated with new pipelines as a problem-solver for network bottlenecks, under a least-cost approach. This option reduced idleness and lowered gas transmission costs by 60%. In addition, it increased the network operation reliability and created a virtuous cycle, where a better planning reduces the gas tariffs and spur infrastructure expansion by raising the fuel competitiveness.