ENGIE’s LNG and Hydrogen Supply Chain Optimization

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 LocalSolver 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 such as vessels or trucks can supply cryogenic liquid gas from sources to customers, possibly using intermediate hubs. Each carrier is characterized by its storage capacity and costs and the list of sites that it can visit. A tour is a distribution trip starting from a source with full capacity and visiting a certain number of sites, unloading a fraction of the capacity at each site, and finally getting back to the starting source. A planning is a set of tours over the horizon. The cost of the planning 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 ones?

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 to 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 to test of 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.

Example of an LNG supply project optimized using ENGIE Optiretail software solution

Why LocalSolver?

Following a successful performance benchmark against MILP solvers including Gurobi and IBM ILOG CPLEX, ENGIE teams chose LocalSolver as an optimization engine to motorize their supply chain optimization software solution. LocalSolver 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 gases supply projects.

Optiretail designs an optimal Liquefied Natural Gas (LNG) or Liquid Hydrogen (LH2) supply chain, minimizing the total project cost from sourcing to delivery. This powerful digital solution based on LocalSolver allows ENGIE to reduce the cost of LNG or LH2 distribution by up to 15% and foster the development of new uses for LNG and Hydrogen.

Gabrielle Ménard Liquefaction Lab Manager, ENGIE Lab CRIGEN

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