Stochastic cost-benefit analysis to assess new infrastructure to improve the reliability of the natural gas supply

The reliability of a natural gas system involves the capacity of the supply, transportation, storage and distribution system to provide service without short-term interruptions in the event of contingencies. Typically, increasing the gas supply reliability implies diversification of gas sources, transportation re-dundancies or larger gas storage capabilities. In addition, the combined operative uncertainty of the transportation pipeline and gas supply are not considered when assessing the impact of new infra-structure seeking to increase the gas supply reliability. To overcome these deficiencies, we propose: (i) a stochastic cost-benefit analysis; (ii) a pipeline contingency model using topographical, societal (violence) and pipeline information; and (iii) a supply contingency model of scheduled and unscheduled mainte-nance. Moreover, we consider both the gas supply and transportation uncertainties using a Monte Carlo simulation and an optimization model; furthermore, the expected cost-benefit is estimated. Our methodology is applied and calibrated to the Colombian natural gas system to estimate the expected cost-benefit of a new pipeline: Jobo -Medellin. The results show that the expected benefit-cost ratio (BCR) of this pipeline is 2.02 and that the probability of having an economic benefit greater than the cost is equal to 99.0%.(c) 2022 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

Automated summary

The reliability of a natural gas system is crucial for uninterrupted service. This study proposes a methodology involving stochastic cost-benefit analysis, a pipeline contingency model, and a supply contingency model to assess the impact of new infrastructure. The application of this methodology to the Colombian natural gas system shows that the expected benefit-cost ratio of a new pipeline is 2.02, with a 99.0% probability of economic benefit exceeding the cost.