Optimisation of a downstream oil supply chain with new pipeline route planning

Abstract

The planning of downstream oil supply chains (DOSCs) is important to guarantee that the demand of retail markets (RMs) can be satisfied. As an economic method for refined oil transport, pipelines are widely used in many DOSCs. The distribution cost can be reduced, and the efficiency can be improved by constructing new pipelines in a DOSC. In this paper, an MILP model that optimises a DOSC with new pipeline route planning is developed. Constraints for refined oil distribution and pipeline route planning are proposed. The model also considers the transport between storage depots (SDs) and makes it practical for the real-world application of a DOSC in China. Based on the current DOSC, the routes of new pipelines and supply chain planning after new pipeline construction can be obtained. This method is applied to a real DOSC case in China, and two situations are analysed. This method can also help decision makers conduct optimal pipeline route planning and create distribution plans for other DOSCs.