A robust model for supplying LNG from different contracts considering overall and incremental discount options

Abstract

ABSTRACT In order to transport natural gas to long distances, it is economical that the natural gas is converted into the liquefied natural gas (LNG). Several countries look forward to conclude the contract for purchasing LNG. In the present research paper, it was assumed that a customer (country) would be provided LNG due to its high demand for a long period. Different contracts that include overall and incremental discount options have been offered to the customers by different vendors. In addition, the customer may consider meeting a certain part of the demand from the spot market. Three factors are important while concluding the LNG contracts: the evaporation rate, the quality, and the operational costs. In the present study, first, the best level of each factor was concluded by utilizing the LINMAP method, following which a robust model was presented in order to determine the amount of LNG that should be purchased from each contract as well as from the spot market. The mathematical model was tested through a numerical example which included 10 contracts with different options.