How ENGIE saves 15% on LNG and hydrogen supply chain costs using Hexaly
ENGIE is a French multinational utility company that operates in energy transition, electricity generation and distribution, natural gas, nuclear, renewable energy, and petroleum. In 2021, the company employed 160,000 people worldwide with revenues of €58 billion. ENGIE’s Liquefied Natural Gas (LNG) and Liquified Hydrogen (LH2) supply chain optimization represents a significant financial challenge. After a benchmark on the subjacent optimization problem, ENGIE has chosen Hexaly Optimizer against MILP solvers like Gurobi and IBM ILOG CPLEX to motorize their in-house LNG and LH2 supply chain optimization software solution, namely Optiretail.
ENGIE’s LNG and LH2 supply chain optimization problem
Several onshore customers need to be supplied with cryogenic liquid gas, like LNG and LH2, from sources. The demand of each client is known for every time step. Different transportation means, like vessels or trucks, can supply cryogenic liquid gas from sources to customers, possibly using intermediate hubs. Each carrier is characterized by its storage capacity, costs, and the list of sites it can visit. A tour is a distribution trip starting from a source at full capacity, visiting a certain number of sites, unloading a fraction of its load at each site, and finally getting back to the starting source. A schedule is a set of tours over the horizon. The cost of the schedule is composed of fixed costs and operating costs. The objective is to minimize this cost over a long-term horizon, typically 20 years.
Input data
- Source locations
- Potential hubs
- Customer locations and weekly consumption
- Min/max storage size and associated construction costs
- Type of carriers with associated construction costs
Decisions
- Which periodic routes to supply clients over the long run?
- What size for site storage? What size for carriers? How many carriers?
Constraints
- Storage level dynamics: no runout, no overflow
- Carrier/site compatibilities
Objectives
Minimize the Total Cost of Ownership (= CAPEX + OPEX) of site storage and carriers over the operating horizon.
ENGIE’s LNG and LH2 supply chain optimization software
The Optiretail software solution helps ENGIE’s analysts design optimal supply chains for cryogenic liquid gas supply projects, from sourcing to delivery, by minimizing the project’s total cost (CAPEX and OPEX). It enables testing new configurations quickly and can be used for project dimensioning and real-time optimization for all market opportunities: power, fuel for road and marine transportation, and industrials.
This digital solution allows ENGIE to reduce the cost of cryogenic liquid gas distribution by up to 15% and promote the development of new uses for LNG and Hydrogen. As another proof of excellence and performance, ENGIE’s Optiretail software won the LNG Innovation Award at the 2018 World Gas Conference (WGC 2018) in Washington, DC.
Why Hexaly?
Following a successful performance benchmark against MILP solvers, including Gurobi and IBM ILOG CPLEX, ENGIE teams chose Hexaly as an optimization engine to motorize their supply chain optimization software solution. Hexaly allows them to obtain near-optimal solutions for the long-term planning of delivery routes and storage within only a few minutes of running time. The resulting software solution Optiretail is now operationally used by ENGIE to carry out supply chain design studies for its cryogenic liquid gas supply projects.
Optiretail designs an optimal Liquefied Natural Gas (LNG) supply chain, minimizing the total project cost from sourcing to delivery. This powerful digital solution based on Hexaly Optimizer allows ENGIE to reduce the cost of LNG distribution by up to 15% and foster the development of new uses for LNG.
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