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Economic Appraisal of gas supply to power plants in imbalance conditions through LNG imports
(with a virtual pipeline approach and regasification at destination)
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Abstract: (9 Views) |
The energy imbalance crisis in Iran, especially in the natural gas sector, has transformed from a seasonal challenge to a structural bottleneck for economic development. This imbalance, which reaches more than 300 million cubic meters per day during the cold months of the year, poses a serious threat to the stability of the national electricity grid, which is more than 90% dependent on natural gas. This research, with an applied approach and with the aim of developing an economic evaluation model, analyzes the option of importing liquefied natural gas (LNG) through floating storage and Regasification units (FSUs) and distributing it in liquid form to power plants through a virtual pipeline (road and rail transport) and performing the regasification process in small-scale satellite facilities (SSLNG) at the destination. The total cost of LNG on the Iranian coast is estimated to be around $13.5 per million BTU based on the JKM index and the FSU operating tariff, which represents a significant reduction compared to the FSRU model due to the lower rental tariff (around $60,000 per day for FSU versus $150,000 per day for FSRU). Based on land logistics assumptions, the variable cost of LNG road transportation is about $0.25/MMBTU/100 km and the rail cost is about $0.10/MMBTU/100 km. At the destination, the cost of constructing small-scale regasification facilities including ambient air vaporizers (AAV) with a fixed investment of $10,000 to $100,000 per unit and no active energy consumption is required, along with local storage tanks, is included. The results of the economic break-even analysis indicate that in the diesel substitution scenario (opportunity cost of $22.4/million BTU), road LNG is economically viable up to 1,200 km and rail LNG is economically viable up to 2,000 km. In the fuel oil substitution scenario (opportunity cost of $16.5/million BTU), the justifiable road distance is limited to 400 km; but rail transport extends this distance to 1,000 km
JEL Classification: P28, Q40, L71, H43, E3, O13.
Keywords: LNG, gas imbalance, FSU, virtual pipeline, LNG satellite facility, ambient air vaporizer (AAV).
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| Keywords: JEL Classification: P28, Q40, L71, H43, E3, O13.
LNG, gas imbalance, FSU, virtual pipeline, LNG satellite facility, ambient air vaporizer (AAV). |
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Full-Text [PDF 796 kb]
(19 Downloads)
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Type of Study: Research |
Subject:
مدل هاي نفت و گاز
Received: 2026/05/23 | Accepted: 2026/08/24 | Published: 2026/10/2 | ePublished: 2026/10/2
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