A Lagrangean Decomposition Heuristic for the Design and Planning of Offshore Hydrocarbon Field Infrastructures with Complex Economic Objectives

Abstract

In this work, we present a multiperiod mixed-integer nonlinear programming model for the long-term design and planning of offshore hydrocarbon field infrastructures with complex economic objectives. We show that when complex fiscal rules, such as tariff, tax, and royalty calculations are added to the model, substantial increases in the net present value of the project are obtained. However, including these calculations leads to more than an order of magnitude increase in the computational effort required. To address this problem, we propose a specialized heuristic algorithm that relies on the concept of Lagrangean decomposition. We present an iterative scheme where feasible solutions are postulated from the Lagrangean decomposition, and multipliers are updated through a subgradient method. Results show that for moderately sized models up to 2 orders of magnitude of reduction in solution time is obtained compared to the full-space solution. Larger problems that could not be solved in 5 days of computation ...