Optimization Based Decision Making for the Natural Gas Pipeline Network at Emera Energy

Emera Energy (EE) is a wholly owned unregulated subsidiary of Emera Inc. which operates in the physical*natural gas and electricity markets in the United States and Canada. Natural gas (NG) is a very volatile*commodity and is traded daily along the spot and forward markets. One of the ways in which natural gas*marketers such as EE optimize their portfolio is by hedging the intrinsic value of storage facilities and*transportation assets in the forward markets and then optimizing their trade in daily markets. The commercial*analytics group assists the trading groups in making commercially beneficial decisions, valuing and optimizing*assets, reporting on performance and markets. Currently, they are interested in using big data analytic*capabilities in providing optimization based solutions for what are essentially non-linear asset management and*network flow problems. EE has identified a gap in their analytical capabilities. Currently, there is no asset and*network flow optimization framework for decision making.*This project seeks to close the gap based on operational research techniques for natural gas flow storage and*transportation optimization. It will lay the groundwork for an optimization based decision support system for*natural gas storage and transportation at Emera Energy, Inc.. Upon successful completion of the project,*analysts will be able to optimize the flow of NG through the network (based on asset rights and pipeline*capacity availability) at an operational level (daily basis); at the tactical level (annual basis), they will be able to*evaluate the expected value of their network and make asset purchase decisions. Furthermore, they will be able*to conduct "what-if scenarios" using simulation to estimate demand parameters and use the optimization model*to evaluate the impact of the parameters on the optimal decisions for profit maximization.