Natural Gas Sales Research Articles

A study of operational decisions of city gas operators under the energy metering and pricing model

This study examines the quantitative conditions under which an energy metering pricing model is proposed to increase both gas merchant profits and gas customer consumer surplus compared to a volumetric pricing model. The quantitative condition is found to be related to factors such as the standard unit calorific value of natural gas prescribed by the National Development and Reform Commission (NDRC) and other relevant government departments under the energy metering pricing model. This paper establishes a mathematical model based on optimization theory to explore the operational decisions of city gas suppliers in the volumetric and energy metering and pricing modes, respectively, under the condition of relatively stable natural gas sales price. The results of the study show that DAC and other authorities can regulate the standard unit calorific value of natural gas under the energy metering and pricing model by regulating the standard unit calorific value of natural gas. This affects the incentives of gas dealers to produce and operate, guides the preference of gas users for natural gas energy metering and pricing, and results in the derivation of formulas for a reasonable range of standard unit calorific values for natural gas. The findings of this paper provide theoretical support to promote the reform of natural gas energy measurement and pricing, and contribute to the development of the natural gas industry.

Defining trends in the evolution of the Russian gas market

The new “driving force” of the liberalization of the conditions for the functioning of the gas sector associated with demonopolization and the formation of an effective structure of the domestic gas market with a high level of competition and fair principles of the organization of natural gas trade for Russian consumers are the ongoing changes in the economic situation in the global energy market. Against the background of the expected decline in pipeline gas exports to Europe (the volume of decline may amount to 100 billion cubic meters in the medium term) it is important to focus efforts on the development of the domestic gas market, since the task in these conditions is more urgent than ever. First of all, to accelerate the transition to market pricing mechanisms (except for the population) using indicative prices on the stock exchange and within the framework of inter-fuel competition. Currently, gas prices in the domestic market are subsidized by exports, which, as mentioned above, is going to decrease, which in turn will lead to a decrease in such subsidies, and accordingly, there will be a need for higher rates of price growth in the domestic market. The importance of further development of gas exchange trading in Russia is emphasized on various government platforms. The main guidelines for improving the exchange mechanisms for the sale of natural gas are contained in the “National Plan (Roadmap) for the development of competition in the Russian Federation for 2021-2025”. It should be noted that the development of gas exchange trading should take place by increasing the economic attractiveness for participants, creating favorable economically conditioned prerequisites for an equal supply of gas to the exchange for all sellers, as well as developing an appropriate regulatory framework.

Robust LNG sales planning under demand uncertainty: A data-driven goal-oriented approach

This paper addresses the liquefied natural gas (LNG) sales planning problem over a pipeline network with a focus on uncertain demands. Generically, the total profit is maximized by seeking optimal transportation and inventory decisions, and robust optimization (RO) has been a viable decision-making strategy to this end, which is however known to suffer from over-conservatism. To circumvent this, a new goal-oriented data-driven RO approach is proposed. First, we adopt data-driven polytopic uncertainty sets based on kernel learning, which yields a compact high-density region from data and assures tractability of RO problems. Based on this, a new goal-oriented RO formulation is put forward to satisfy to the greatest extent the target profit while tolerating slight constraint violations. In contrast to traditional min–max RO scheme, the proposed scheme not only ensures a flexible trade-off but also yields parameters with clear interpretation. The resulting optimization problem turns out to be equivalent to a mixed-integer linear program that can be effectively handled using off-the-shelf solvers. We illustrate the merit of the proposed method in satisfying a prescribed goal with optimized robustness by means of a case study.

THEORETICAL PRINCIPLES OF INFRASTRUCTURE MANAGEMENT OF OIL AND GAS ENTERPRISES BASED ON PUBLIC-PRIVATE PARTNERSHIP

This article describes the concept of infrastructures, their economic description and analysis of the current situation in oil and gas enterprises, improving the mechanism of managing infrastructures of oil and gas enterprises, reducing the rate of natural losses in the supply, transportation, distribution and sale of natural gas, investment by foreign and domestic investors. implementation of innovative clusters to improve enterprises' competitiveness and scientific research aimed at improving management on the basis of public-private partnerships in order to reduce state subsidies to monopolistic enterprises is based on feasibility.

IMPACT ANALYSIS OF LOSS INDUSTRIAL SECTOR AT PT PERTAMINA PERSERO

The Covid-19 pandemic hampered the company's cash flow and reduced public demand for fuel oil, natural gas, geothermal energy at PT Pertamina Persero that year. It was noted that in 2020 PT Pertamina Persero experienced a rapid decline which resulted in losses. This has an influence on the profit earned by PT Pertamina. This study aims to describe the factors that caused PT Pertamina to experience losses, describe the losses experienced, and describe the role of commissioners in the losses that occurred at PT Pertamina. This research uses the literature study method, this is done because literature sources are obtained from journals, information from print media, research reports, articles, and other sources. The approach in this study uses descriptive qualitative, with the aim of describing and disclosing the phenomena that occur in depth and systematically. Pertamina's losses were caused by the pandemic (Covid-19) and the decline in operating income due to the sale of crude oil, natural gas, heat energy and oil production is experiencing a decline. The Role of the Board of Commissioners Against PT Pertamina's Losses, The Board's duty is to examine the competence of the Company and management, management usually pays attention to the Company and its business activities, advises managers on the company's income. In carrying out the supervisory duties of the board of commissioners and in preparing plans for the benefit of the company,

Riding the Roller Coaster—Today's Natural Gas Market and the Future

The beginning of 2023 has witnessed the biggest decline in natural gas prices in a long time. Production has been at record highs, an exceptionally warm start to January suppressed supply demand, and liquefied natural gas (LNG) exports have been down since June 2022 when Freeport LNG's export facility went offline due to a fire at its facility. The CME/NYMEX February natural gas futures contract slid to an 18‐month low of $2.94/MMBtu and expired at $3.109/MMBtu, down 54 percent from where the contract closed just two months earlier in December 2022. In other words, market prices plunged, and in the middle of the winter—usually the strongest period for natural gas sales and prices. The March contract extended the slide to a 20‐month low of $2.677/MMBtu. Freeport's eventual return will restore existing LNG export capacity, thus picking up demand levels, and by the time of publication of this column may be back in service. However, there is no new LNG export capacity due online this year—for the first time since 2016. After one of the tightest natural gas markets of the last decade in 2022, which pushed prices much higher than they had been for a long time, other than during the short but fierce Winter Storm Uri experience in 2021, things they are a'changing. The stage is set for one of the most oversupplied markets the industry has seen in years. However, in keeping with the natural gas industry's history of keeping traders on their toes, it looks as if we are reaching the end of the steady oversupply we have experienced since 2009, when the Shale Revolution swarmed in to move the entire industry from shortage to abundance, and enabled U.S. energy independence to take root. How did we get here, and how does the future look for natural gas supply and prices?

Nodal and least-cost analysis on the optimization of natural gas production system constraints to extend the plateau rate of a conceptual gas field

The supply of natural gas in any country is determined by energy demand. Furthermore, supply agreements specify that gas should be supplied at a constant rate for a specified period. However, due to the decline in reservoir pressure as gas fields continue to produce, high constant rate production is usually uncertain, and the plateau may not reach the agreed-upon period. Therefore, this study was conducted to optimize gas production system constraints and extend the production plateau rate of a conceptual dry gas field. The field was made up of the sand packages CF2 upper, CF2 lower, CF1 upper, and CF1 lower. A total of 1316.9 Bscf were assumed to be the estimated gas field reserves, and 423.3 Bcf were assumed to be the remaining economically recoverable gross 2 P sales of natural gas. The field also contained natural gas at the Miocene and five production wells, numbered PW-1, PW-2, PW-3, PW-4, and PW-5. The field's estimated average constant gas production rate as of July 2021 was 85 MMscfd. The field's gas demand was forecasted in three phases, with the third beginning on November 1, 2019, at a rate of 130 MMscfd. After applying Nodal Analysis with the help of Integrated Production Modelling (IPM) and Least Cost Analysis methods, the study found that the gas production plateau of that field started to decline on March 1, 2017, after 1 year and 5 months of production when constrained to 130 MMscfd. However, after modifying the constraints to match various assumed production histories, it was discovered that the plateau would start to decline on June 1, 2023, after 8 years of production. Therefore, eight possible combinations of varying the three production constraints were developed and simulated to examine their effect on extending the field production plateau. These constraints were separator pressure, tubing size, and the number of layers perforated. The best combination was to lower the separator pressure to 725 psia, increase the tubing size to 4 inches, and perforate three more zones (zones I, C, and D). This was the only combination that appeared to extend the production plateau for 8 years until October 1, 2031, as required in the 16 years gas sales agreement (GSA). This approach was economically compared to the options of using a compressor and drilling future wells, and it was found to be 34.05% cheaper than the compressor usage option and 98.25% cheaper than drilling a well. As a result, the operators of this conceptual gas field are advised to adopt this approach to extend the field's plateau.

The geopolitics of trillion US$ oil & gas rents

Physical oil and gas abundance, turned in market scarcity, do prices of oil and gas spike and cashed rents mount. For the years 1970-2020, the rents from crude oil and natural gas sales are expressed in US$-2020, revealing the magnitude and volatility of the money flows. Peak rents coincide with turmoil implying particular oil & gas exporting countries. Oil & gas geopolitics metamorphosed from conquering oil deposits to precluding oil & gas exports by ‘hostile’ nations. Such preclusions turn physical abundance in market scarcity, boosting oil & gas prices and rents (also called royalties, windfall, excess profits). Rent skimming is also a part of the 2022 Ukraine war. Climate change mitigation intensifies geopolitical efforts to curtail the exports of ‘hostile’ nations.

The Emerging Certified Natural Gas Market

The natural gas industry is increasingly utilizing certified natural gas as a means to address Environmental, Social, and Governance (ESG) commitments, with a particular emphasis on the reduction of methane emissions. Certified natural gas has emerged as a multi‐faceted commodity that has stirred up considerable debate as it begins to reach beyond bilateral transactions between producers and end users, and into the tariff filings and business practices of transportation providers and other actors along the natural gas supply chain. As this article surveys the landscape of certified natural gas and provides an overview of the well‐known certification providers, it will also explore a few of the issues and concerns raised by commenters within several Federal Energy Regulatory Commission (FERC) dockets concerning the Tennessee Natural Gas PCG Pooling Service Option—the first tariff proposal of its kind by an interstate pipeline to establish paper pools for the sale and purchase of certified natural gas. Finally, this author will take a brief glance at the North American Energy Standards Board (NAESB) efforts to facilitate certified natural gas transactions through the ongoing development of a standardized NAESB Certified Gas Addendum to the NAESB Base Contracts for Sale and Purchase of Natural Gas.

Natural Gas Sales Optimization Strategy of PT XYZ in East Java

The condition of supply and demand for natural gas in East Java will experience dynamics, based on government work plans for Java gas pipeline, Tuban refinery and new gas field development. This research aims to analysis and simulate the gas market from 2021 to 2035 and develop gas marketing strategy to optimize PT XYZ's revenue. The Dynamic Model System method is used in scenario and market analysis, the AHP method is used for segmentation, targeting and positioning, while the Focus Group Discussion is used for the implementation strategy of optimizing revenue from gas sales. The results of the study show that during the period 2022 – 2025, the gas market in East Java experienced an excess of gas supply by 249 mmscfd, the second period in 2026-2030 the gas market was still a surplus of 53 mmscfd, but in 2030-2035 the gas market experienced a shortage of 260 mmscfd. PT XYZ's strategy is to prioritize the fertilizer sector, PGN industry and electricity through gas traders as the main buyers by using the main criteria for volume, utilization period and gas price as a reference in preparing scenarios and implementation strategies. The scenario is optimistic that the improve in gas production and maximize gas marketing will increase PT XYZ's revenue and position as the market leader in East Java. Keywords: AHP, gas marketing, natural gas, optimization, system dynamic model

FORMATION OF NEW LOGISTIC NODES OF GAS TRADE IN THE COUNTRIES OF SOUTH-EASTERN EUROPE

The countries of South-Eastern Europe had close economic ties with Russia and were guided by the purchase of Russian natural gas. In the recent years, both geopolitically and the market events, as well as the energy security concerns, have transformed the region of South-Eastern Europe into a significant element of the energy strategy of the European Union. The emergence of new gas suppliers in this region is due to both the requirements of the European Union for the diversification of energy supply sources and the active formation of new gas corridors in Eastern Europe, in particular, the launch of a large gas terminal in Poland. The creation of a new gas infrastructure exacerbates competition between suppliers and requires market participants to develop optimal gas supply options for consumers adapted to new conditions. The article examines the features of the formation of promising gas hubs in the countries of South-Eastern Europe. The specifics of the development of the gas market in Bulgaria and Greece are shown. Attention is focused on strengthening Turkey's position as an important gas corridor. The results of the study allow us to conclude that the energy infrastructure in this region is still underdeveloped. The region does not offer an efficient market mechanism for the sale and purchase of natural gas, as well as a spot pricing mechanism. At the same time, amid heightened competition on the European gas market, South-Eastern Europe is beginning to play an increasingly significant role in maintaining Russia's position as the largest gas supplier.

NATURAL GAS AS A SUBJECT OF GEOPOLITICAL INTERESTS OF STATES

In the last decade, the subject of sale, purchase or transit of natural gas between the countries in Europe has gained, in addition to the economic dimension, a much broader, and for some countries even more significant, geopolitical dimension. This is most evident based on the attitude of the United States and some European countries towards the projects for the construction of the Nord Stream 2, Turkish Stream and South Stream gas pipelines. By displaying a negative attitude towards these gas pipelines, the United States (with the support of some European countries) has formally emerged as a “protector of the energy interests of European countries” from Russian influence, i.e. Russian gas. Essentially, the United States is trying to slow down, reduce and suspend gas supplies from the Russian Federation (RF) to European countries, especially the most powerful ones (Germany, for example), and disguised by the need to “diversify gas supplies to European countries”, thus reduce Russia’s presence in Europe and quality of interstate relations. At the same time, the United States is trying to offer and sell its liquefied natural gas to European countries as an alternative to Russian gas, and to “fill in” the empty geopolitical space. The Russian Federation, on its behalf, instructed by the experiences from several “gas crises” with Ukraine, but also in accordance with its geopolitical interests, seeks (and has almost succeeded in doing so) to ensure the transport and sale of its gas by building new gas pipelines to Europe and improve relations with European countries. Other European countries, which need Russian gas, are trying to ensure energy security by participating in the construction of the gas pipeline, or by supporting the realization of that project. The fate of the gas pipeline and thus the possibility of gas distribution to individual states becomes a subject of interest (and conflict) of the great powers and their geopolitical interests.

Risk-benefit perceptions of natural gas export in Oregon

ABSTRACT Public perceptions of fracking and natural gas have received significant scholarly attention recently. However, opinion research is scant with respect to natural gas export (the transport and sale of natural gas from one country to another via pipeline or ship) and its associated economic benefits and environmental risks. Understanding public views on export, particularly in places where export facilities are proposed, is important because the U.S. has rapidly increased its natural gas exports overseas in the wake of the shale revolution. Moreover, such facilities have been targeted by anti-fossil fuel and climate activists as a weak link in the chain of the fossil fuel economy, particularly on the U.S. West Coast where proposals for export terminals have proven unsuccessful. Using a web-based opinion survey in the state of Oregon (n = 500), we evaluate risk and benefit perceptions of natural gas export and the role of socio-demographic, political ideology, and place-based factors in shaping these perceptions. We find that men, conservatives, urban residents, and those who perceive that their community’s economic identity is tied to extractive industries are less likely to perceive risks and more likely to perceive benefits from natural gas export. Respondents with a bachelor’s degree and those who perceive that their community’s economic identity is tied to renewable energy are more likely to perceive risks and less likely to perceive benefits. Whereas much of energy social science is focused on sites of extraction, our results contribute to the growing understanding of the social dimensions of energy export.

The Problems of Development of the Natural Gas Market in Ukraine on a Competitive Basis

In the article the main parameters of functioning of the natural gas market in Ukraine are analyzed in the context of ensuring competitive relations between economic entities on it. It is revealed that the sphere of natural monopoly includes the markets of transportation, storage and distribution of natural gas; it is reasonable to consider the natural gas supply market as potentially competitive, because the supply of natural gas is provided by many suppliers as for industrial consumers and for the population. JSC «Ukrgazvydobuvannia» and NJSC «Naftogaz of Ukraine» with all entities related to it by control relations occupy a monopoly (dominant) position on the natural gas sales market directly from the producer. The trends of price changes in the retail natural gas market for household and non-household consumers have been investigated. The comparative analysis of domestic prices for natural gas and its delivery with the prices of European countries has been carried out, the structure of natural gas prices for households in Ukraine and EU countries is given. The key aspects of the development of the national retail and wholesale gas market are highlighted. The level of concentration in the wholesale natural gas market has been investigated using the Herfindahl-Hirschman index. It has been revealed that the level of concentration of its various segments may vary from low, which certifies the existence of a competitive environment, to high, which is inherent in a monopoly. This market is still at the stage of formation, the level of competitiveness is significantly differentiated by different suppliers. It should be noted that most gas consumers were not prepared for the introduction of the natural gas market, they did not have sufficient information about the rights guaranteed by the state and the opportunities provided by legislation. It has been found out that violations of competitive activity in the natural gas market are quite frequent and the main ones found by the Antimonopoly Committee of Ukraine have been considered. The main factors influencing the development of the competitive environment in the domestic natural gas market are given and the main problems of its formation are identified.

Law and economics challenges of natural gas—the hard case of Mexico

Abstract This article addresses the risks and uncertainties for Mexico derived from the excessive dependency on US natural gas. It will take as a reference Btu price fluctuation and the covenants contained on the based contract for sale and purchase of natural gas, particularly in the context of the behaviour displayed by market participants (including governments) during the recent winter storm energy crisis in Texas which consequently forced shortages in Mexico due to a lack of ‘available’ natural gas to produce power (electricity). The research question includes: Should Mexico exploit its vast natural gas resources although it might not be a sustainable or a cost-effective (economically–socially and environmentally) decision? (The curse of the TEX-MEX-NG). Or instead, would it be better to prepare (within the limits of its financial situation) to address the US natural gas price fluctuations, like price hedging? Or a combination of both?

Проблемные аспекты правового регулирования внешнеэкономической деятельности экспортеров газа как участников биржевой торговли газом за рубежом

According to the Energy Strategy of the Russian Federation until 2035, the indicator of solution of the task of a flexible response to the world gas market dynamics is retaining by the Russian Federation of the dominant position of top three world gas exporters. Russian exporting companies are interested in trading in natural gas in European exchanges, as exchange trade in natural gas gives an opportunity to diversify the existing natural gas export mechanisms, gain access to highly liquid natural gas sales channels. At present, there is little legal research dedicated to challenging aspects of the legal regulation of exchange trade in energy resources, access of exporting companies to foreign exchanges. There are gaps and discrepancies in the existing legal regulation of this sector. The author reviews peculiarities of the legal regulation of relationships arising in trade in natural gas in European exchanges, the requirements set for exchange participants, the existing restrictions of these operations for Russian exporting companies, brings forward legal regulation development proposals.

Challenging Aspects of the Legal Regulation of International Economic Activities of Gas Exporters as Parties to Exchange Trade in Gas Abroad

According to the Energy Strategy of the Russian Federation until 2035, the indicator of solution of the task of a flexible response to the world gas market dynamics is retaining by the Russian Federation of the dominant position of top three world gas exporters. Russian exporting companies are interested in trading in natural gas in European exchanges, as exchange trade in natural gas gives an opportunity to diversify the existing natural gas export mechanisms, gain access to highly liquid natural gas sales channels. At present, there is little legal research dedicated to challenging aspects of the legal regulation of exchange trade in energy resources, access of exporting companies to foreign exchanges. There are gaps and discrepancies in the existing legal regulation of this sector. The author reviews peculiarities of the legal regulation of relationships arising in trade in natural gas in European exchanges, the requirements set for exchange participants, the existing restrictions of these operations for Russian exporting companies, brings forward legal regulation development proposals.

Residential gas supply, gas losses and CO2 emissions in China

Natural gas has become an important energy source as its combustion is much cleaner than coal combustion and emits significantly less carbon. However, as natural gas combustion does result in some carbon emissions, government policy and monitor are needed to improve natural gas use, and reduce CO2 emissions. Previous research has tended to focus on natural gas production efficiency and the relationships between natural gas and economic growth; however, there have been few papers focused on natural gas consumption efficiency evaluations in terms of urban and industrial energy consumption efficiency and CO2 emissions efficiency. To fill this research gap, this study examined the natural gas consumption efficiencies (Natural gas consumption efficiency refers to the efficiency of natural gas from production to final consumer purchase) in 30 provinces/municipalities/autonomous in China from 2007 to 2016 by collecting and analyzing the main natural gas industry input-output index data: labor, natural gas pipe length, fixed assets, natural gas sales volume, residential gas supply, gas losses, and CO2 emissions. An Undesirable DDF (directional distance function) Dynamic Data Envelopment Analysis model was then used to analyze and compare the efficiencies in each natural gas industry index (gas industry index indicates whole indicator used on efficiency evaluation in this paper, such as labor, natural gas pipe length, natural gas sales volume, residential natural gas supply, natural gas losses, CO2 emission) in each province. We also set carry over variable which can link each period, here fixed assets is set as carry over due to its character that accumulates over period. It was found that the overall efficiency in 16 provinces. had been declining year on year and there were significant improvements needed in natural gas pipe length and natural gas losses; however, it was also found that the natural gas industry in most provinces needed to place greater importance on improving CO2 emissions efficiency. The results indicated that to improve overall gas industry operating efficiency and CO2 emission efficiency, new technologies were needed in several key areas: pipeline design, construction and maintenance management to reduce the loss rate in the old pipeline infrastructure, natural gas facilities to improve energy use, and personnel training and management to improve construction capabilities. This study is an interdisciplinary survey. Natural gas is an energy issue, CO2 emission is an environmental issue, and the method used in this study is DEA which is widely used in management and economic research. Therefore, this study combines different issues and the empirical data of China to do an interdisciplinary research.

Russian natural gas sector: current situation, perspectives, and its importance for Europe

The aim of the article is to outline the prospects for the Russian natural gas market in the future and to present the Russian gas sector in comparison with the strategic “players” of the global market. The author examines the issues related to the production, transmission and sale of Russian natural gas. The main problem concerns the possibilities and limitations, that influence the power of the Russian “blue fuel” sector. The article presents briefly the results of the research, which were obtained mainly through the method of case study. The verification of the main hypothesis will be made from the top–down perspective, considering analysis of the actions of state decision-making centres. Less explicit impact, including the interaction of non-public actors (such as economic items), will be skipped, because their more precise consideration would provide to the interesting, but different direction of analysis of the sectoral groups of interest.

ЕКОНОМІКА МАЛОГО ПІДПРИЄМСТВА НА РИНКУ НАФТОПЕРЕРОБНИХ ПРОДУКТІВ У КОРОТКОСТРОКОВОМУ ПЕРІОДІ

The economic and diagnostic analysis of a small business trading enterprise that operates on the market of oil and fuel raw materials in the Zaporizhzhia region was conducted. Trade is one of the most important branches of the economy in which products are selling to consumers, and it does not matter how and where exactly goods or services are selling. Effective dynamic development of individual trade enterprises is very important for the development of the economy of Ukraine as a whole. The resource and consumer market is one of the sectors of the domestic economy that is developing most dynamically. It solves socially important tasks of providing enterprises with raw materials, and the population with goods and services in the future. The degree of its development significantly affects not only the overall development of the economy, but also the state of production and the quality of life of the population. This statement can be fully attributed to the market of oil products and diesel fuel. The microenterprise that we are investigating is a full-fledged participant of it. The key sector of this market is the trade in refined oil products, fuels and other goods, which currently provide a significant part of the country's tax revenue. This is what determines the relevance of diagnostics of a commercial enterprise that operates on the market of the oil refining industry. In the course of the research, the economic and organizational foundations of the enterprise's functioning, including relationships with suppliers and consumers, were thoroughly analyzed. The economic analysis of the company's performance indicators over the past two years, in particular, the financial and economic results of its activities, was carried out. Price analysis of purchases and sales was performed. A review of the commodity and geographical structure of product turnover was also conducted. The further prospects of the company's development were substantiated, including the forecast of price and profit dynamics for the short-term period. As measures to improve the efficiency of microenterprise development in the short term, the sale of natural gas (which is a new promising direction of business development at the regional level) and the introduction of advertising mechanisms were proposed.