The Journal of Energy Markets · 2010 · 35 citations · 0 references
ManagementOperations ManagementSupply Chain ManagementInventory ControlInventory ManagementSupply Chain EngineeringInventory OptimizationInventory StrategyNatural Gas Market EconomicsSeasonal Inventory ManagementSupply Chain CoordinationSupply Chain OptimizationLiquefied Natural GasLiquefied Natural Gas ContractsLiquefied Natural Gas MarketsLng MarketsNatural GasNatural Gas Supply ChainsObligationsSupply Chain Routing
ABSTRACT Natural gas is one of the fastest growing energy sources in the world and, due to liquefaction of natural gas, natural gas markets are becoming global and involve moving liquefied natural gas over large distances by vessel. We present an optimization model that provides decision support for the liquefied natural gas supply chain by coordinating vessel routing, inventory management (upstream, onboard and downstream), trading and contract obligations. The model maximizes profit by utilizing different trading contracts, seasonal variations in pricing, price differences between different markets and inventory routing. We look into how the model may change some of the business practices in the industry.