Natural Gas Pipeline Transmission Optimization for China National Petroleum Corporation
China National Petroleum Corporation (CNPC) is China’s largest oil and natural gas producer and supplier and controls 75 percent of the country’s natural gas resources and pipeline network. Over the past five years China’s natural gas consumption has nearly doubled and the demand for natural gas is expected to grow at a steady rate. To better serve the increasing demand, CNPC partnered with researchers from the University of California, Berkeley and Tsinghua University (Beijing) to apply innovative operations research in order to develop and implement a new software that optimizes the operation of its natural gas pipeline network. Previously, all annual production and construction planning for CNPC was manually conducted using spreadsheets. However, the increasing size and complexity of China’s natural gas pipeline network caused the manual method to result in excess costs and wasted resources. Since the implementation of the new optimization software at the end of 2014, CNPC has realized approximately $530 million in direct savings and extra revenue. Meanwhile, the increased efficiency of the existing pipeline network has postponed the need for new pipelines, leading to an estimated savings of over $18 billion in construction costs.