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Optimal Construction and Operation of the GCC

Regional Natural Gas and Electricity Production and Transmission Systems

Muhammad Al-Salamah, F.T. Sparrow, Brian H. Bowen, Zuwei Yu

Institute for Interdisciplinary Engineering Studies Purdue University

West Lafayette, IN 47907-1293, U.S.A., Fax: 765-494-2351

8th Power Generation Conference, Dubai, October 6 to 9, 2002

Abstract Most countries of the world are becoming more aware of the importance of integrated energy systems to their economies. What benefits are to be achieved from integrated energy systems, across a region, to the participating member countries? A large-scale optimization model for natural gas production, shipment, and storage, is being designed at Purdue University, for an application to the GCC Region. This regional gas model determines the least cost (present value) for meeting the region’s total domestic and export demands for natural gas. It is a natural gas supply model that will interface with the long-term regional electricity supply model created by Purdue’s State Utility Forecasting Group (SUFG) in 1997-2000. Using similar methodologies both models will optimize simultaneously to reach solutions that represent the inter-dependency between natural gas supply and electricity supply. The plan to establish a natural gas network in the GCC region is now under-way. The gas model will assist the GCC in its planning of the new gas infrastructure and provide least cost analysis for expansion to its facilities in the next 10 to 20 years. 1. Regional Gas Model Concepts In this paper, we outline a mathematical programming model for the distribution of natural gas in the GCC region. The model will shed light on the importance of an integrated gas distribution system connecting these countries in terms of increased potential for electricity generation. As we will discuss later, the establishment of such a system comes with it a host of costs and restrictions, both physical as well as monetary, and these costs and restrictions ought to be included in order for the model to be accurate and the results that may be drawn from it to be feasible. Figure 1 depicts a simple topology of the gas model. The square represents the gas source. Circles represent cities – residential or industrial. Triangles represent electric power plants. The Diamond represents a storage site. Links represents pipelines. Arrowed links represent pipelines that run in one direction and undirected links represent pipelines that run in both directions and can represent more than two pipelines. Circle with + sign represents a gas import port while the circle with × sign represents a gas export port.

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This diagram represents the simplified gas supply network. Gas first is produced in gas plants and then transported to cities, power plants, storage areas, and it can be exported to other countries. Cities, power plants, storage areas, export ports, and import ports are linked in pairs with pipelines. So a direct gas flow between any two nodes is permitted, except between any two storage areas within a country. Gas flow is not permitted to go back to any gas plant. Export and import ports are the points that connect country networks together. Storage areas serve dual functions. They serve as consumption points when gas is injected into them and as production nodes when gas is withdrawn from them. Gas can be stored for later use when demand is greater than supply or/and when we are faced with an increasing gas production cost. Our model is a multi-period mixed integer programming model. The model consists of a linear function subject to a set of linear constraints. The objective function minimizes the sum cost of the gas production, transportation, storage, shortage, and gas supply system expansion. The expansion part of the model deals with building new storage tanks, new gas sources, and new pipelines. There are nine sets of constraints in the model. They deal with the conservation of flow at all nodes of the network, pipeline capacity, and capital investment etc. The issues involved in the gas modeling are complex and making sound decisions is anything but easy. Several examples of the complexities are; (1) how much gas is produced from each source, (2) how much gas is stored and when, (3) the volume of gas trade, (4) the economic decisions of building new gas sources and support systems, (5) where and when to build new electric power plants, (6) and other economic considerations. The model can easily address these complexities, and is a great tool for decision makers. In this paper, we present a natural gas supply system to support the electricity sector in the countries of the GCC. This system helps to allocate natural gas sources, mainly in the areas adjacent to the Gulf, to areas where gas is scarce, for example, the Central and

Figure 1: The natural gas supply system.

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Northern regions of Saudi Arabia and Southern regions of the United Arab Emirates. Interruption of electricity supply, due to gas shortage, will be minimized this way. 2. Gulf Natural Gas Supplies

Gulf crude oil and natural gas supplies are vitally strategic not only to nations of the region but also to the global economy as a whole. Reserves within the GCC and other nations of the Middle East are second only to those of Russia. Both supplies for gas and electricity within the region are growing substantially faster than those of the more industrialized nations. For these reasons and to sustain and promote economic growth and social welfare large development projects are taking place such as the Dolphin Venture [23] and the Saudi Arabian Natural Gas Initiative [20]. Many other major energy projects are also being considered across the region.

Table 1: Gulf Natural Gas Reserves in the GCC, January 1, 2000 [11]

Natural Gas (Trillion Cubic Feet)

Bahrain 4 Kuwait 55 Oman 29 Qatar 347 Saudi Arabia 206 UAE 211 Total 852

Gas comes from various sources and one of the most abundant sources of gas, in the Gulf Region, is from oil wells. According to the EIA International Energy Outlook 2001, the Gulf region is one of the world’s richest sources of natural gas [11]. In 2000, the Middle East has shown the largest increase in natural gas reserves [11]. Saudi Arabia, in particular, is increasing its natural gas reserves as more oil fields are discovered. Natural gas is vital to sustain a growing demand for electricity. Transporting gas is also of importance. Gas transportation has many forms: pipelines, trucks, ships, etc. Electricity generation is dependent on gas availability. In remote areas where there are no natural gas sources, for example the northern, southern, and central regions in Saudi Arabia, gas availability is of concern. One solution to the problem of gas availability is a regional natural gas supply system. A regional natural gas supply system will be necessary to meet a growing demand for electricity. Figure 2 shows the growing trend in the consumption of electricity in the countries of the GCC. The data by EIA, in its 1999 International Energy Annual, show that the electricity consumption in the GCC has risen by 432% from 1980 to 1999, an average annual increase of approximately 9.3% [11]. This increase in electricity demand is attributed to the increase in population size, expanding infrastructure, and growing industrial sector.

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Gas-powered electricity generating stations gain popularity as concerns for environment and fuel efficiency [2]. Gas-based technologies also prove attractive to both utilities and governments. For example, a combined cycle generating unit can have an efficiency exceeding 60%. Low NOx emissions are secured by gas-power generators. To meet environmental targets governments all around the world are imposing pollutants restrictions on every industry, including electricity industry [8]. In the GCC, the single most type of electricity generation is thermal [11]. For example, 56.8% of the generation capacity of electricity uses gas. In the GCC countries, natural gas will remain the primary fuel in power generation [2]. Gas Developments in the Gulf Region The GCC countries are not fully integrated in the area of natural gas trade and there are plans to establish a natural gas network that connects all the member states. Recommendations and discussion for the establishment of this network started in the early 1980s [2, [17]. However up until 1998, there had not been any real action taken. In 1998, a firm step was taken when the petroleum ministers in the GCC countries discussed in their meeting in Riyadh the project to build a united network for natural gas supply and they examined the results of feasibility studies concerning the project [15]. And in 1999, the undersecretaries of ministers of petroleum in the GCC states started their meeting to discuss the project and their recommendations were presented at the following meeting of the ministerial committee of the GCC states [14]. Later in the same year, GCC officials charged one of its offshoot organizations, the Gulf Organization for Industrial

20.040.060.080.0

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Year

Bill

ion

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Figure 2. The Total Net Electricity Consumption in the GCC, 1980-1999.

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Consultancy (GOIC), to carry out a feasibility study on creating such a project [13]. A year and a half later, the six Gulf States approved the first phase of a regional natural gas network [16]. The proposed natural gas network is going to connect the six GCC countries: Saudi Arabia, Oman, UAE, Qatar, Bahrain, and Kuwait. The network will consist of pipelines permitting the flow of gas amount the member countries. It has been said that the project would bring economic benefits to the GCC countries [13, 16]. While the natural gas network for the GCC region is being approved and implemented, there are two major projects in a smaller scale that are being proposed which are going to supplement the wider GCC region network. One major natural gas project that is approved and being implemented is the Dolphin venture. It is intended to link Qatar to Abu Dhabi, Abu Dhabi to Dubai, and Dubai to Oman; and the link can reach as far as Pakistan [13, 16, 23]. The project was launched in March of 1999 to stimulate industrial and business investment in the participating countries and the gas is scheduled to be delivered in early 2005 [23]. The production of natural gas starts from the Khuff formation in Qatar’s North Field, where it is transported then to a gas gathering and processing plant at Ras Laffan- see Figure. 3 . The processed gas is then transported through a 340 km undersea pipeline to a platform offshore of Abu Dhabi. From this platform, two pipelines will emanate, one to

Figure 3: Dolphin venture [23].

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Abu Dhabi and one to Dubai, with 49km and 69km lengths respectively [[23]. The project is massive since about 2 billion cubic feet of gas per day will be transported from oil fields in Qatar to gas consumers in UAE [23]. There is another major project that has been approved and being implemented that is no less in scale than that of Dolphin venture even though it is confined to one country. The Saudi Arabian Natural Gas Initiative has been endorsed by the Saudi government in 2001 and the initiative will provide gas to the industries of electricity, water desalination and petrochemicals [18]. The initiative is divided into three core ventures or projects. Core Venture One, which is called the South Ghawar, is the largest of the three; Core Venture Two is located on the Red Sea coast. Shaybah in the Empty Quarter is Core Venture Three. The first two projects are in the area of the great Empty Quarter, and the third is along the Red Sea coast in the northwest part of the country [12, [19, [20] (see Figure. 4). These projects will provide natural gas supply to electricity, desalination, and petrochemical plants. At present, there are no available information on the specifics of the projects and how long and what the capacities of the pipelines are going to be, but the initiative is the biggest project for natural gas allocation in the Middle East. The distribution of the natural gas from these projects will be facilitated using the already existing Master Gas System, the backbone of the Kingdom's industrial development program. The Master Gas System (MGS), built in 1980s, provides fuel and feedstock to the petrochemical and industrial complexes at Yanbu' on the Kingdom's west coast and

The Master Gas System

Red Sea

Gulf

Empty Quarter

Figure 4. The Saudi Arabian Natural Gas Initiative [20].

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Jubail on the east coast. It also powers essential utilities, supplies NGL for domestic use and export, and yields liquid sulfur, which is pelletized for export. The MGS can process nearly 4.5 billion standard cubic feet of gas per day. The pipeline is 726 miles long and has a maximum diameter of 30 inches [9]. 3. The Purdue Long-Term Electricity Model

Both the Purdue regional long-term electricity model and this new regional model are essentially policy analysis tools to assist utilities and governments in their assessing of options for supplying future growth in energy demand. The models are transparent providing parameters that are easily available to change and for critical policy analysis and least cost planning. With the electricity model the utility managers and planners can describe and insert their own policy constraints very readily. Running the model is a relatively low cost exercise compared with commercial utility software packages (only incurring the cost to purchase the GAMS and CPLEX solvers). With this low cost and transparent optimizing characteristics these Purdue regional energy trade models, being easily transportable, are suitable and quickly available as an analysis planning tool for utilities and planners around the world. To summarize the electricity model, that will run in parallel with the gas model being described in this paper, it is a mixed integer model minimizing the present value of total costs (fuel, operational and maintenance, capital investments, unserved energy and unmet reserve capacity) with 36 representative hours for each year. Typical planning horizons are 10 years and each country is considered as one node for the national aggregate demand and supply subject to a set of constraints. Major constraints include:

• Supply/demand equations which insure that user specified demands are met for each hour modeled.

• Capacity constraints which insure that each plant’s generation does not exceed current derated capacity.

• Reliability constraints which insure that a proper reserve margin is maintained. • Hydrological constraints to insure generating capacity is proportional to water

inflow and a current water balance is maintained. • Transmission line load capabilities and line losses. • Generation and transmission capacity expansion over the 10 year horizon.

Many user options are allowed. A few of the major ones include:

• Supply and transmission options. • Demand characterization options, demand peaks, growth rates. • User specified margins for thermal, hydro and purchased capacity. • Free, bilateral or multilateral trade options. • Fuel, operation and maintenance costs. • Utility determined levels of reliability. • Specified levels of autonomy between countries.

Further details on this model are found in [21] and [24].

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4. Natural Gas Supply Model & Assumptions The notation for variables and parameters for gas flows start to become numerous as the size and extent of the regional gas model becomes more applied to regional planning needs. A formulation for the gas flows from a source and injections into storage (for existing and proposed tanks), storage balance, and gas flows in the power plants and cities is now provided. Consider the natural gas supply system in such a region as the GCC. Each country z (z = 1, …, 6), has GI gas sources (gi = 1, 2, …, GI) which, through pipelines, are connected to GK storage tanks (gk = 1, 2, …, GK), GJ cities −residential and industrial− (gj = 1, 2, …, GJ), GD gas export ports (gd = 1, 2, …, GD), and NI electric power plants (ni = 1, 2, …, NI). There is a total of GE gas import ports (ge = 1, 2, …, GE). All storage tanks, cities, export ports, import ports, and power plants are connected with each other with unidirectional pipelines (flow in one direction). To permit the expansion of the system, GIN new gas sources (gin = 1, 2, …, GIN) and GKN new storage tanks (gkn = 1, 2, …, GKN) can be built in any country; and these quantities represent the maximum number that is allowed and not necessarily the exact number required if the decision is to expand. The model, which is the subject of this paper, is dynamic in that we study the system as it evolves over time. Because of the long-term nature of the study, we choose two time indices: months (tm = 1, …, 12) and years (ty = 1, 2, …, TY). The gas production balance is illustrated in Figure 5 for the existing gas source. Further details are given about the formulation of the gas model in [3] for both existing and proposed new sources. The existing gas sources are those that were built before or completed by the first month of the first year of the planning horizon. New gas sources are those that are built during the planning horizon.

To city gj GFSCty,tm,z,gi,gj

To storage gk GFSTty,tm,z,gi,gk

To export gd GFSDty,tm,z,gi,gd

To power plant ni GFSPty,tm,z,gi,ni

Figure 5: Gas Flow from a Gas Source.

To new storage gkn

GFSTNty,tm,z,gi,gkn

GPty,tm,z,gi

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The total gas production, GPty,tm,z,gi, from gas source gi, in country z, in month tm, and year ty has to equal to sum of gas flow to all cities, storage tanks, export ports, power plants, and new storage tanks. The flow of gas out of a gas source is balanced using the following constraint: GPty,tm,z,gi =∑

gjgj,gi,z,tm,tyGFSC +∑

gkgk,gi,z,tm,tyGFST +∑

gdgd,gi,z,tm,tyGFSD

+∑ni

ni,gi,z,tm,tyGFSP +∑gkn

gkngi,z,tm,ty,GFSTN , ∀ ty, tm, z, gi.

Gas Model Assumptions We assume the following assumptions when we developed our model: 1) Unidirectional pipelines: Unidirectional pipelines are pipelines that permit the gas to

flow in one direction only. 2) Pressure inside the pipelines: The pressure inside the pipelines can be constant or can

vary. The flow of gas through the pipelines is not affected by the gas pressure level. 3) No lower bound on gas in storage tanks: Many gas models have assumes a lower

bond on gas in storage tanks. This lower bond is called the cushion gas. 4) Deterministic: We assume that gas supply and demand are deterministic. 5. Natural Gas Storage Modeling The literature on gas storage models is limited. There are, however, some studies in this area that are of tremendous value. Studies range in complexity from simple− the model by Brooks [7]− to more complex and more detailed− the model by Bopp et a.l [4]. The work of Brooks [7] was motivated to study the effect of the guidelines that were put into place in the United States during the 1970’s when the country had experienced for the fist time a shortage in natural gas. In this work, he presents a natural gas allocation model, which depicts the complex interactions between the gas suppliers or producers, distribution companies, transshipment, and storage areas. This model is called GASNET3 system, which went through several refinements before it has reached its final form. What we are concerned about in this paper is the gas storage modeling which is the subject of this section. As it is stated in the paper, the storage areas are included in the model for the purpose of supplying gas when the demand for gas is greater. Natural gas flows from producer companies to distribution companies and storage areas through pipelines. If supply is greater than demand, then part of the gas produced can be stored in the storage areas. In the future, gas can be withdrawn from storage areas to satisfy the demand when the gas demand is greater than the gas supply. However, the model does not have maximum capacity on the gas that can be stored in the storage areas. In another study, Brooks [6] talks about two important concepts in natural gas inventory management. When gas supply is greater than demand or during off-peak seasons, gas is stored in storage tanks for later use, of course when doing so is economically desirable. Gas in the tanks is stored under pressure and when it is needed it can be withdrawn by

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means of pressure. The amount of gas that is injected and kept in the tank to maintain a pressure is called the cushion gas. The gas injected above cushion gas is called the working gas. In the gas model described by Al-Salamah [3] the storage tanks are used for two main purposes. First of all the storage tanks can be used to offset sudden fluctuations in gas demand; and without disruption to the supply network, demand can be met. They are excellent solutions in the face of forced and unforced gas supply system outages. Secondly gas can be stored for later use when faced with increasing gas prices or when demand for gas is higher than the gas production capacity in future periods. It is assumed that storage can never be less than 0 (no borrowing). Figure 6 shows the gas flows in and out of a storage tank. The gas storage level GSTRty,tm,z,gk , in the Al-Salamah model, is determined by three sets of constraints. The first set specifies the within-the-year storage balance requirement. In country z, storage tank gk, and year ty, the gas level in month tm is determined by the gas level in month tm-1 and plus the amount injected minus the amount withdrawn. In the Al-Salamah model, the gas storage level is determined by three sets of constraints. The first set specifies the within-the-year storage balance requirement. In country z, storage tank gk, and year ty, the gas level in month tm is determined by the gas level in month tm-1 and plus the amount injected minus the amount withdrawn. The gas level in the tank in the first month of year ty is determined by the tank level in the last month of year ty-1 plus the injection minus the withdrawal. The first month of the first year of the planning horizon is treated differently, however. The inventory level in ty=1 and tm=1 is determined by the starting inventory level plus injection minus withdrawal. The model requires that the leftover at the end of the planning horizon be some pre-specified amount. This requirement will be treated as a parameter to the model.

Figure 6 Gas injection and withdrawal in a storage tank.

To city gj GFTCty,tm,z,gk,gj

To plant ni GFTPty,tm,z,gk,ni

To export gd GFTDty,tm,z,gk,gd

From import ge GFETty,tm,z,ge,gk

GFSTty,tm,z,gi,gk From source gi

GFPTty,tm,z,ni,gk From plant ni

GFCTty,tm,z,gj,gk From city gj

GFSNTty,tm,z,gin,gk From new source gin

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Bopp et al. [4] presents elaborate descriptions of gas inventory and storage modeling. Four sets of constraints that describe the inventory balance requirements, beginning and ending requirements, storage capacity, and injection and withdrawal requirements are provided. The first set describes the inventory balance requirements where it is required that the ending inventory has to equal the starting inventory plus the injections minus the withdrawals. In their paper, the time increment is a quarter of a year− 90 days, and hence the amount injected and the amount withdrawn is the sum of the total amount injected and withdrawn during the 90 days, respectively. This type of constraints illustrates the mechanics for the inventory buildup and depletion. The second set of the inventory constraints specify the beginning and ending inventory requirements. It is required that the beginning inventory has to equal to some pre-specified value and that the ending inventory is no less than some pre-specified value. In addition, in any time period, the inventory cannot exceed storage capacity. The forth set of constraints specifies that the amount of gas injected into or withdrawn from storage cannot exceed the maximum deliverability level. Modifications to the Al-Salamah gas model constraints take into account the possibility that the storage tank may or may not be built. These comprehensive gas constraints and others are all detailed in [3]. A full notation is also provided there. 6. Costs in the Model There are three types of costs; production, transportation, and investment. They are defined below. The production cost model is a functional equation that has as its input the quantity of gas produced and has as its output the cost of production, in monetary value. The production cost function is usually considered in models where the objective is to minimize the system total supply cost. In models for long term planning, the future cost is discounted to the present or to some base time. In the literature, we have found studies that deal with natural gas supply modeling considering different objectives. But there are few models that deal with production cost, as part of other cost components in the model. Duffuaa et al [10] and Waverman [22] have considered a linear production function in their models. There is no apparent reason why they have chosen a linear function; but we think that a linear cost function is easier to deal with in modeling. In addition, linearity of the production cost will be desirable from a computation point of view. The cost associated with a natural gas supply has many components. The sum of these components is the objective function that we try to minimize, to the constraints presented next. These components sum up all the costs associated with the production of gas, transportation, storage, shortage of gas in a city, and capital costs in new gas sources, storage tanks, and new pipelines. All costs are discounted to the base year using a discount rate.

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This form of the objective function is appropriate since there is no competition in the gas industry in the GCC countries, (see Al-Alawi [2]). Production (running) cost In our model, we have a linear production cost function that consists of two summations. The first summation in the function is the total cost of natural gas production from existing gas sources. The second summation is the total cost of natural gas production from new gas sources. Transportation Cost The transportation cost is the cost of transporting natural gas from one point in the gas network to another point. Like the production cost function, the transportation cost function can have any functional form. In the literature, we have found a few studies that are dealing with minimizing the transportation cost. For example, Aboudi [1], Duffuaa [10] and Waverman [22] assume linear transportation cost. The cost of transportation is determined by multiplying the amount of gas transported by the unit cost of transportation, most often as dollars per cubic feet. Transportation cost of gas is the expense we incur when the gas is transported from one end of the pipeline to the other end. Losses and use of gas as transportation fuel determine the transportation cost. The transportation cost component has 30 summations corresponding to the 30 different types of pipelines. Investment (capital) cost in new gas sources The investment cost in new gas sources is the total discounted costs of erecting new gas sources. Investment (capital) cost in new gas storage tanks The investment cost in new gas storage tanks is the total discounted costs of building new gas storage tanks. Investment (capital) cost in new pipelines The investment cost in new pipelines is the total discounted costs of building new pipelines. The total gas production from gas source gi, in country z, in month tm, and year ty has to equal to the sum of gas flows to all cities, export ports, power plants, and storage tanks. Like the existing gas sources, new gas sources have balance and capacity requirements. 7. Regional Natural Gas Balance Gas Demand Balance in a City: The end users in the natural gas model are cities and power plants. The term city is a general term to encompass a residential city or town. Moreover, a city can be an industrial establishment, other than a power plant. Also, the term city can mean a region

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that consists of many cities. Figure 3 shows various kinds of pipelines coming in and going out of a city. The gas balance constraint in a city specifies the relationship between the gas consumption in the city and the in-flows minus out-flows of gas. The gas demand or consumption in a city is constant, unlike the demand for gas in power plant where the gas demand is determined by the demand for electricity which is itself a variable. The gas demand can be met from other nodes in the network, including other cities. Gas Demand Balance in a Power Plant: Power plants are the nodes that are of special interest in the natural gas supply model. Gas consumption in a city is an input to the model, whereas the gas consumption in a power plant is treated as a variable. The gas consumption in a power plant is related and proportionate with the electricity generated. Gas Balance and Capacity in an Import Port: An import/export port is a place where a country network is connected to another network in another country via pipelines. The purpose of having these ports in the model allows a free flow of gas among the different gas networks. An import port is where gas is injected from external networks to the local network when demand for gas increases. In general, any country can import gas from any country which it does not necessarily have a border with. This flexibility in gas flow is not only going to increase the usability of the model but also it is going to keep the complexity of the model within reasonable limits. Gas Balance and Capacity in an Export Port: Export ports are the gates for countries to export natural gas to other countries. They serve the same basic functions as the import ports. An export port is where gas is withdrawn from the internal network to an external network when the external demand for gas increases. Within a country’s local gas network, gas can flow from all gas sources, storage tanks, cities, and plants to all export ports. 8. Precedence Constraints Expansion projects have to be built in order. For example, a new gas source has to be built before or at the same time the pipelines connecting this new gas source to the gas network are built. The constraints that impose this restriction are called the precedence constraints. 9. Gas Pipeline Capacity Constraints The capacity of a pipeline is the maximum amount of gas it can transport. What determine the amount of gas that can be transported are the pipeline size and the power of the compressor. Knowing these will help in determining the capacity of the pipeline.

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10. Pipeline Loss Estimation When the gas is transported through pipelines, some of it gets used and some of it gets leaked. It rarely happens that all the gas transported gets to the end of the pipeline and often some of it gets leaked and some of it is used by compressors to further pump the gas along the pipeline. Obviously, the pipeline loss is dependent on the length of the pipeline and the terrain of the region it passes through. Longer pipelines will have more loss than those which are shorter. Also, more pipeline fuel will be needed to transport the gas to push it uphill in case of steeper terrain. The pipeline loss estimation has to be estimated and this step in the model analysis is very crucial to obtain valid and meaningful results. As stated before, the pipeline loss is determined by the fuel used by the compressors and leakage. For the expansion stage, data about pipeline losses are not available before hand since the new pipelines will be built at some time in the future and we do not have any knowledge of how much fuel will be consumed by the compressors and how much gas will be leaked. The pipeline loss has to be determined by the fuel consumed by compressors and gas leaked and if we have some idea on the length of the new pipeline that we are planning to build and the geographical area it passes through, then we can determine the pipeline loss. A word of advice is in order regarding loss estimation. After a value for the pipeline loss has been determined, a sensitivity analysis has to be undertaken and if it is found that the results are very sensitive to the value of the pipeline loss then more care and effort are necessary to arrive at a better estimate. There are methods which can be helpful in this stage. For example, we can raise the accuracy level by doing a benchmarking study where we look at similar pipeline systems that are in existence and operating which are similar in structure and terrain to the system under study. For existing pipelines, the pipeline loss estimation can be found with more accuracy. Historical data can be proven to be very valuable to help in estimating pipeline losses. Usually, they are very readily available in the information files and gas companies keep track of these important Figures. For more discussion on loss estimation using historical data, the reader is advised to refer to Brooks [6], pages 17 and 18, and Brooks [7], pages 36 and 37. 11. Next Step in Regional Data Collection & Sensitivity Analysis The gas model outlined in this paper, as already mentioned, is to be a parallel regional model to the Purdue regional long-term electricity model [5, 21, 24]. Full details of the gas model are in [3]. In order to now consider regional application in substantial detail and to work on national restructuring and energy expansion planning the sensitivity analysis for regional energy planning priorities then comprehensive data collection training and date management systems are needed. Resulting from the events of September 11, 2001, and the unexpected delays in international travel, the data collection process has been postponed and initial testing of the new gas model is now planned for 2003.

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[23]. "What is Dolphin? " www.uaedolphin.com. [24] https://engineering.purdue.edu/IIES/PPDG/ Biographies Muhammad Al-Salamah is an associate researcher with Purdue University’s electricity and natural gas modeling team and a Ph.D. candidate in Purdue’s School of Industrial Engineering. His research interests are in applications of mathematical programming to energy planning and economics. He has received a scholarship, from the Systems Engineering Department, King Fahd University, to continue his research interests in the United States. He has also worked with ARAMCO, Saudi Arabia. F.T. Sparrow has been professor of industrial engineering and economics at Purdue University since 1978. He has a Ph.D. in economics and operations research from the University of Michigan. He is director of the Purdue State Utility Forecasting Group (SUFG) and the Power Pool Development Group (PPDG) with his interdisciplinary interests focusing on energy modeling and analysis. Honored as a Ford Foundation research professor, his is also a consultant to various agencies and utilities. Brian H. Bowen is associate director of the Power Pool Development Group, PPDG, at Purdue University, where he received his Ph.D. in industrial engineering. Before his association with Purdue he worked in West Africa and Southern Africa for 17 years in engineering education and energy. His research interests are in power pool development, energy trade modeling, and engineering in economic development. Zuwei Yu is an associate professor of courtesy appointment and senior analyst with the State Utility Forecasting Group (SUFG) at Purdue University, which he joined in 1996. He has a Ph.D. in electricity engineering from the University of Oklahoma. He has extensive experience in electricity market modeling for different markets around the world and is the chief modeler for SUFG studies on electricity industry restructuring for Indiana and natural gas modeling.