OPTIMIZATION OF ROUND SHAPE FLOATING LNG SUPPLY CHAIN EFFICIENCY

WITH SIMULATION MODELING

SANUSI

A project report submitted in partial fulfillment of the

requirements for the award of the degree of

Master of Engineering (Industrial Engineering)

Faculty of Mechanical Engineering

Universiti Teknologi Malaysia

JANUARY 2013

ABSTRACT

Supply chain management plays very pivotal role in business operation of

LNG due to increase of gas demand and need of optimization of supply chain

process to achieve high profitability and customer satisfaction. Optimum LNG

supply chain is obtained through the integration among states in supply chain and

high utilization of facilities in every single stage. Integration of those stages should

be considered in early stages before actual operation is performed. An effort to

integrate LNG supply chain to get optimum performance requires simulation

modeling. Critical factors impact the performance metrics were identified by using

statistical design of experiment principles, subsequently simulation modeling was

used to evaluate various what if (experiments) for determining the interaction among

the factors and significance of the factors in LNG supply chain. In the simulation, the

critical factors such as storage capacity, offloading rate, transportation capacity and

number of LNG carrier were identified. The results of this study indicate that

transportation capacity and number of LNG carrier are the most significant factors in

achieving optimal amount of LNG in receiving terminal and high performance of

LNG carrier. Then, the obtained result was used to design LNG supply chain of

Round Shape FLNG using Visual Basic (VB). From the simulation, it is concluded

that the optimal balancing of LNG supply chain with 997 tonnage per hour for

production capacity requires seven LNG carriers with capacity 93,900 tonnage,

storage capacity 288,530 tonnage and offloading rate 7940 tonnage per hour. This

combination resulted the amount of received LNG in receiving about 8,013 million

tonnage per year and performance of LNG Carrier is about 99,85 %.

vi

ABSTRAK

Pengurusan rantaian bekalan dalam operasi LNG ini memainkan

peranan yang sangat penting dengan peningkatan jumlah permintaan gas dan

keperluan dalam mengoptimumkan proses ini untuk mencapai keuntungan yang

tinggi dan dapat memberi kepuasan kepada pelanggan. Pengoptimuman rantaian

bekalan LNG dapat diperolehi melalui integrasi di setiap negara dalam membentuk

rantaian bekalan dengan jumlah penggunaan yang tinggi di setiap peringkat. Dalam

setiap peringkat tersebut perlu dipertimbangkan pada peringkat awal sebelum

pendedahan sebenar dilaksanakan. Satu usaha untuk mengintegrasikan rantaian

bekalan LNG untuk mendapatkan prestasi yang optimum dengan memerlukan

model simulasi. Kritikal faktor telah dikenal pasti dengan menggunakan reka bentuk

statistic dengan menggunakan prinsip percubaan, kemudian model simulasi telah

digunakan untuk menilai pelbagai eksperimen bagi menentukan antara faktor dan

kepentingan faktor dalam rantaian bekalan LNG. Dalam simulasi, faktor kritikal

seperti kapasiti penyimpanan, pemunggahan LNG, pengangkutan kapasiti dan

bilangan pengangkut LNG telah dikenal pasti. Keputusan simulasi menunjukkan

kapasiti pengangkutan serta nombor pengangkut LNG adalah faktor yang paling

penting dalam mencapai jumlah optimum LNG yang diterima dan pengangkut LNG

yang tinggi. Kemudian, hasil yang diperolehi telah digunakan untuk mereka bentuk

rantaian bekalan LNG dalam bentuk bulat FLNG dengan menggunakan Visual Basic

(VB). Dari simulasi yang dilakukan, disimpulkan bahawa keseimbangan optimum

dalam rantaian bekalan LNG dengan 997 tan sejam bagi kapasiti pengeluaran

memerlukan tujuh pembawa LNG dengan kapasiti muatan 93,900 tan, 288530 tan

kapasiti penyimpanan dan kadar pemunggahan 7,940 tan sejam. Gabungan ini

diterima dalam menghasilkan jumlah LNG kira-kira 8,013,000 tan setahun dan

prestasi pengangkut LNG adalah 99,85%.

vii

TABLE OF CONTENTS

CHAPTER TITLE PAGE

DECLARATION ii

DEDICATION iii

ACKNOWLEDGEMENT iv

ABSTRACT v

ABSTRAK vi

TABLE OF CONTENTS vii

LIST OF TABLES xi

LIST OF FIGURES xii

LIST OF ABBREVIATION xiv

LIST OF SYMBOLS xv

LIST OF APPENDICES xvi

1 INTRODUCTION 1

1.1 Introduction 1

1.2 Background of Project 7

1.3 Problem Statement 10

1.4 Project Objectives 11

1.5 Project Questions 11

1.6 Expected Constribution of Project 12

1.7 Scope of Project 13

1.8 Structure of Project 13

1.9 Conclution 14

viii

2 STUDY LITERATURE 15

2.1 Introduction 15

2.2 Definitions of Supply Chain and Supply Chain Management 16

2.3 Decision Phases in a Supply Chain 17 17

2.4 Components of SCM 18

2.5 Supply Chain Optimization 19

2.6 Strategic Supply Chain Optimization 20

2.7 Upstream and Downstream Activities 20

2.8 Push and Pull Type of Supply Chain 20

2.9 Design of supply chain 21

2.10 Integration of Supply Chain 22

2.11 Benefits of Supply Chain Integration And Coordination 23

2.12 Supply Chain in Oil and Gas Industry 25

2.12.1 Definition of upstream, midstream and downstream 25

activities in oil and gas industry 25

2.12.2 Oil and Gas Supply Chain 26 26

2.13 LNG Supply Chain 27 27

2.14 Supply Chain Strategies in Oil and Gas 27

2.14.1 Leveraging the Connections between Pricing and

Supply Chain. 28 28

2.14.2 Integrating Supply Chain and Trading. 28

2.14.3 Linking supply chain and channel management strategy. 29

2.15 LNG Supply Chain Evolution 30 30

2.15.1 Pipelines as a Part Of Supply Chain 30

2.15.2 Floating LNG Supply Chain 31 31

2.16 FLNG Process 33 33

2.17 Simulation 40 40

2.17.1 Verification 41 41

2.17.3 Validation 41 41

2.17.4 Number of Replications 42 42

2.17.5 Simulation Software 43 43

2.18 Process Optimization using Design of Experiment 44

2.19 Conclusions 45

ix

3 PROJECT METHODOLOGY 46

3.1 Introduction 46

3.2 Project Methodology 46

3.2.1 Understanding Business Process and Problem analysis 49

3.2.2 Modeling and Programming 40 51

3.2.3 Report and Documentation 58 55

3.3 Conclusion 59

4 SIMULATION MODELING AND DESIGN OF EXPERIMENT 60

4.1 Introduction 60

4.2 Conceptual Model 61

4.2.1 LNG Supply Chain Flow of Round-Shape FLNG 62

4.2.2 Simulation Process of LNG Supply Chain

of FLNG Using Witness Simulation 63

4.2.2.1 Production and storage on Round Shape 63

FLNG agent

4.2.2.2 Transportation Agent 64

4.2.2.3 Receiving Terminal Agent 66

4.3 Decision Variables 67

4.4 Design of Experiment 68

4.5 Simulation model for LNG Supply Chain of Round Shape FLNG 69

4.6 Conclusion 71

5 RESULT AND DISCUSSION 72

5.1 Introduction 72

5.2 Optimum Supply Chain Parameter Evaluation 73

5.2.1 DoE Analysis of LNG Supply Chain 73

of Round Shape FLNG (Response 1) 74

5.2.1.1 Total Received LNG in Receiving Terminal

(Half Normal Probability Plot) 74

x

5.2.1.2 ANOVA of Total Received LNG in Receiving 75

Terminal analysis

5.2.1.3 Normal Probability Plot and Residual vs predicted 76

5.2.1.4 Main Effect and Interaction Analysis 78

5.2.2 DoE Analysis for Supply chain Balancing (Response 2) 80

5.2.2.1 Percentage of LNG Carrier (Half Normal 80

Probability Plot)

5.2.2.2 ANOVA of percentage of LNG Carrier is busy 81

5.2.2.3 Main Effect and Interaction Analysis 81

5.3 Optimal Setting of LNG Supply Chain of Round Shape of FLNG 83

5.4 Design of LNG Supply Chain of FLNG Using Visual Basic 85

5.4.1 Input Data of LNG supply chain using Simulation Modeling 86

5.5 Conclusion 88

6 CONCLUSION AND RECOMMENDATION 89

6.1 Conclusion 89

6.2 Recommendation 90

REFERENCES 91

APPENDIX A 95

APPENDIX B 104

APPENDIX C 111

APPENDIX D 116

APPENDIX E 117

xi

LIST OF TABLES

TABLE NO. TITLE PAGE

1.1 Typical Gas Compositions 4

3.1 Experimental conditions for the described experiment. 56

3.2 Calculation of mean and standard deviation estimate 57

4.1 Production Process Rate 64

4.2 Levels of Factors 65

4.3 Experimental Metric 68

5.1 Experimental Response 73

5.2 Analysis of Variances (ANOVA) output from Design Expert. 75

5.3 Setting of LNG Supply chain 83

5.4 Selected setting of LNG Supply chain 84

xii

LIST OF FIGURES

FIGURE NO. TITLE PAGE

1.1 World Market Energy Use 2

1.2 World Energy Consumption by Fuel. 3

1.3 LNG Exporters by Country 5

1.4 LNG Importer by Country 5

1.5 Conventional LNG Supply Chain -from Upstream to Distribution 8

1.6 Floating LNG supply chain process: from Upstream to Distribution 8

2.1 Components in the SCM concept 18

2.2 Entire Supply Chain in Oil and Gas Industry 26

2.3 Fully integrated (traditional) model 29

2.4 Conventional LNG supply chain 30

2.5 Floating LNG supply chain 31

2.6 LNG Process Overview 33

2.7 Liquefaction Process 36

2.8 Storage Type 39

3.1 Flow Chart of Research Methodology and Simulation Modeling 48

3.2 Display of Witness 2004 software 52

4.1 Full Integrated of LNG Supply Chain of Round Shape FLNG 62

4.2 LNG Supply Chain of FLNG from Production to Power 62

Generation

4.3 Round Shape FLNG Production Process and Storage 63

4.4 A typical Supply Chain of LNG 65

4.5 Location of Round Shape FLNG Project in Indonesia 66

4.6 Schematic diagram of LNG Terminal 67

xiii

4.7 Process Flow of LNG Supply Chain of Round Shape FLNG 70

4.8 LNG Supply Chain Simulation Process 71

5.1 Total Received LNG in Receiving Terminal (Half Normal 74

Probability Plot)

5.2 Normal Probability Plot of VOC emission by mode operational 77

5.3 Residual vs Predicted 77

5.4 Main Effects A (No of Vessel) 78

5.5 Interaction Graph for number of vessel and storage capacity 80

5.6 Main Effects A (No of Vessel) 82

5.7 Desirability Graph 85

5.8 Input data of LNG Supply chain simulation 86

5.9 Simulation process of LNG supply chain 87

5.10 Output of LNG Supply chain 87

xiv

LIST OF ABBREVIATION

EIA - Energy Information Administration

CO2 - Carbon Dioxides

LNG - Liquefied Natural Gas

FLNG - Floating Liquid Natural Gas

LPG - Liquefied Petroleum Gas

SCM - Supply Chain Management

FEED - Front End Engineenering Design

DoE - Design of Experiment

NGL - Natural Gas Liqued

km - Kilometer

km2 - kilometer square

m - Meter

m/s - Meter per second

NO - Nitric oxide

N2O2 - Dinitrogen dioxide

N2O3 - Dinitrogen trioxide

NO2 - Nitrogen Dioxides

NOx - Nitric Oxides

O2 - Oxygen

PM - Particulate matter

SO2 - Sulphur Dioxides

SO3 - Sulphur Trioxides

SOx - Sulphur Oxides

NM - Nautical Mile

xv

LIST OF SYMBOL

% - Percent

α - level of confidence

S - Standard deviation

x - Mean estimate

n - Number of Replication

xvi

LIST OF APPENDICES

APPENDIX TITLE PAGE

A Programing Code of Visual Basic 2010 96

B Design of Experiment Output (DoE) 104

C LNG Carrier Specification 111

D Gantt Chart of Project 116

E Production Process Flow Rate 117

CHAPTER I

INTRODUCTION

1. Introduction

Demand of liquid natural gas (LNG) is increased significantly due to demand

of natural resources from oil cannot meet the demand requirement. Natural gas as an

energy source is increasing importance as the world’s demand is expected to increase

by 53% between 2008 and 2035 (EIA, 2011). As a consequence of the increasing

market for LNG and uncertainty demand, the supply chain management has become

more complex and the need for decision support has become even more evident.

Consideration of real supply chain optimization issues for LNG including the

production volumes, liquefaction, transportation, storage, regasification and sales

volumes plays a very important rule for the decision making before the actual

execution. In the world, Natural gas is a vital commodity in the global energy

market. It is summarized in Figure 1.1 Clearly; oil is the leading energy source, next

in importance, come coal and natural gas contributing almost 50% of the energy

sources (Energy Information Administration, 2010).

2

Figure 1.1: World Market Energy Use

Liquid Natural Gas (LNG) is a clean source of energy and its popularity is

expected to grow rapidly in the future because it presents many environmental

advantages over oil and coal. Carbon dioxide ( ), A greenhouse gas related to

global warming, is produced from oil and coal at a rate approximately 1.4 to 1.75

times higher than that produced from natural gas. Also, nitrogen oxides ( ),

Greenhouse gas and a source of acid rain, are formed from burning fuel it causes a

wide variety of health and environmental impacts because of various compounds and

derivatives in the family of nitrogen oxides, including nitrogen dioxide, nitric acid,

nitrous oxide, nitrates, and nitric oxide. is produced from burning natural gas

are approximately 20% less than those produced from burning oil and coal. Figure

1.2 shows the projected world total energy consumption by 2030 (Kidnay and

Parrish, 2006)

0%

10%

20%

30%

40%

RenewablesNuclear

CoalNatural Gas

Liquids

10%

6%

26% 23%

35%

2010 World Market Energy Use ( 500 quadrillion Btu ( 12.603 Mtonnes)

3

Figure 1.2: World Energy Consumption by Fuel. (EIA, 2007).

1.1 Overview of Liquefied Natural Gas (LNG) Market and Processing

The production of LNG has been practiced since the 1960’s. The core

concept in producing LNG is the condensation of natural gas. Other processing steps

involve the elimination of undesirable impurities and separation of byproducts. A

typical composition of natural gas is given in Table 1.1

0

50

100

150

200

250

300

1980 1990 2000 2010 2020 2030 2040

Oil

Natual Gas

Coal

Nuclear

Others

Year

World Total Energy Consumtion (Quadrillion

4

Table 1.1: Typical Gas Compositions (Sources: Oil and Gas Journal)

TYPICAL NATURAL GAS COMPOSITIONS, MOLE %

Names of Condensates

No associated gas

Dry Gas Gas condensate Associated Gas

Carbon Dioxide( ) 0.5 2.5 1.0

Nitrogen ( ) 1.1 1.0 1.0

Methane ( ) 94.4 86.5 68.0

Ethane ( ) 3.1 5.5 15.0

Propane ( ) 0.5 3.0 9.0

Iso Butane ( ) 0.1 0.3 2.0

Normal Butane 0.1 0.7 3.0

Pentanes Plus 0.2 0.5 1.0

Total 100.0 100.0 100.0

1.1.1 LNG Exported by Countries

By the end of 2010, 18 countries were exporting their natural gas as LNG

with the total exporter was 223.8 MMtpa. In addition, four countries – Belgium,

Mexico, Spain and the US – were re-exporting LNG imported from another source.

Qatar is by far the largest LNG exporter. In 2010, the country supplied 57.5 MMtpa

of LNG to the market – more than one quarter (26%) of global supply. Pacific Basin

countries, namely Indonesia, Malaysia and Australia are the next largest exporters

and together accounted for 29% of the world’s LNG supply in 2010.

5

Figure 1.3: LNG Exporters by Country (International Gas Union, 2010)

1.1.2 LNG Importer by Country 2010

Japan has traditionally been the largest consumer of LNG and remains with

an annual consumption of 71 MMtpa of LNG in 2010, followed by South Korea at

34 MMtpa. Together, these two countries account for just less than half (47%) of the

world’s LNG consumption.

Figure 1.4: LNG Importer by Country (International Gas Union, 2010)

6

1.1.3 Processing of LNG

The attention is turning to the potential of exploiting stranded offshore gas

field using floating production, liquefaction, storage and offloading vessels – floating

LNG is increased due to high demand and plenty of new small potential Natural

resources available in deep sea. Round shape FLNG represents a fast-track route to

obtain remote gas reserves which will help to bridge the expected supply shortfall in

worldwide LNG production, it causes the interest in the FLNG sector is growing

because of a lack of suitable onshore sites and pipeline infrastructure to offer

economic access to the large number of offshore mid-tier stranded gas reserves.

FLNG projects also offer reduced cost and schedule risk for operations in remote

onshore locations. It is also a mobile asset that can quickly be operated at other

locations.

Round shape FLNG concepts have a number of advantages over conventional

liquefaction plants for offshore resources, not only the ability to station the vessel

directly over distant fields, but also the ability to move the production facility to a

new location once the existing field is depleted.

Therefore, In the round shape FLNG concept, planning and operational

decision play a vital role in the success or failure of firm in determining the supply

chain capacity and design of storage. The challenge to achieving these objectives is

complicated because there are inextricably related and often conflicting. Therefore,

simulation modeling was used to quantify the true performance of a facility, enabling

alternative proposals to be evaluated to ascertain their true worth. This makes

decision-makers easy to identify and address unforeseen issues and exploit

commercial opportunities. The ability to “run the plant before it is built” through

simulation modeling ensures that the world’s leading manufacturers “get it right first

time.”

7

1.2 Background of Project

Any companies are linked to and interacted with other organizations, whether

it is suppliers, customers, third party logistics providers, or intermediaries. The

performance of a firm is dependent on the strengths and weaknesses of its partners in

the supply chain. The competition has moved from competition between firms at the

same level in the production process to competition between supply chains, from raw

materials to end customers. A company’s ability to create trust-based and long-term

business relationships with customers, suppliers, and other strategic partners

becomes an important competitive indicators. Therefore, Tendency towards

increased integration and cooperation between the enterprises in the supply chain

results in greater complexity in the management and control technology, which

requires increased coordination of resources and activities (Birgit and Tage, 2005).

Viewed from company’s activity, LNG can be considered a single product.

The process starts from under water production, liquefaction, storage, transportation

and regasification is shown in Figure.1.5 for conventional and Figure 1.6 for Floating

LNG supply chain process. A brief overview of each step along the chain is provided

below.

1) Extracting the natural gas from the geological strata

2) Transporting the gas via a pipeline(s) to a treatment and liquefaction

plant;

3) Conditioning and dehydrating the raw gas to remove impurities such as

carbon dioxide and water and the heavier hydrocarbons, which form

natural gas liquids such as liquid petroleum gas (LPG)

4) Liquefying the conditioned gas, through cooling, and storing it in

cryogenic tanks;

5) Loading the LNG into purpose built carrier vessels and transporting it to

international markets;

6) Unloading and storage at LNG receiving terminals;

7) Converting the LNG back to gaseous form by heat exchange; and

8) Distributing the natural gas to the consumer via gas transmission lines.

8

Upstream pilelineTreatment,

Liquefaction and

Export

Transportation Regasification

TerminalDistribution

Figure 1.5: Conventional LNG Supply Chain - from Upstream to Distribution

Receiving

Terminal

Transportation

Transportation

Regasification

Terminal

Distribution

Transportation

Distribution

FEED

Receiving

Terminal

Figure 1.6: Floating LNG supply chain process: from Upstream to Distribution

There are significant differences between conventional supply chain and

FLNG supply chain as mentioned above. For round shaped FLNG, The facility is

moored directly above the natural gas field. It routes Natural Gas from the field to

the facility via riser. When the gas reaches the facility, it is processed to produce

LNG, LPG, and condensate. The processed feed gas is treated to remove impurities,

and liquefied through freezing, before being stored in the hull. Ocean-going carriers

will offload the LNG, as well as the other liquid by-products, for delivery to markets

worldwide.

Supply chain management (SCM) is required to coordinate all input or output

flows so that products are produced and distributed in the right quantities, to the right

9

locations, and at the right time. The main objective is to achieve acceptable total

profits together with the desired customer satisfaction levels by determining the

optimal production plans and schedules, capacity of inventory, transportation and

number of carriers.

The interaction among factors such as upstream, production process

equipments, storage, transportation and receiver are extremely complex and difficult

to obtain balancing without using simulation. The advantage of Simulation process

provides invaluable insight into where unforeseen constraints and bottlenecks lie.

Once potential issues are identified, simulation models allow numerous what-if to be

analyzed to evaluate how best to improve the performance of the LNG supply chain

of Round Shape FLNG. These aids can help understand how existing facilities can be

used effectively resulting in improving the availability and profitability.

Niels Stchedroff (2003), studied modeling a continuous process with discrete

simulation techniques and its application to the LNG supply chain. Banu Y. Ekren

(2008) on the other hand performed a simulation based experimental design to

analysis factors affecting production flow time.

Unlike previous studies, this project used simulation modeling based on an

experimental design approach to determine optimal LNG Supply Chain by

considering the capacity of production, storage, transportation and receiving terminal

7.8 MTA capacities.

Simulation modeling or computer simulation was chosen for this project

work due to its powerful ability in dealing with either simple or complex systems

which are more preferable to measure the possible optimal performance of LNG

Supply Chain. The process of designing a digitalized model representing a real or a

proposed system for the experimentation purpose and understanding of the system’s

actual behaviors with given factors and scenarios. The selected scenario is simulated

10

using Visual Basic for the proposed strategies by considering the balancing of the

LNG supply chain.

1.3 Problem Statement

In the operation of a large LNG processing plant there are uncertainties

related to planning and realization of an optimal operation strategy. Demand of LNG

throughout the world has been increased significantly and followed by the increment

of LNG exploration to meet the requirement. Operating optimal production process

and utilization of equipments to meet the requirement are one of important thing that

must be considered before running the project to avoid losing money due to

inefficiency of related resources and over production. However, the importance of

including the whole production chain (upstream, treatment, liquefaction, storage,

transportation and regasification) in the optimization of the LNG supply chain can

impact to the profit of the project. The whole value needs to be maximized and

balanced to meet optimal utilization of facilities.

There are many possible operational issues will be faced in LNG supply

chain using round shape FLNG. Namely, determining the capacity of storage, LNG

carrier scheduling and terminal storage capacity. The optimal operation cannot be

obtained if one of those variables is not balanced and integrated.

Generally, the problem statement of this Project is how the optimal LNG

supply chain of Round-Shape FLNG project is built by integrating the supply chain

process started from FEED, production process, storage, transportation and receiving

terminal?

11

1.4 Project Objectives

The main objectives of this project are:

i. To identify the problem of Round-Shape FLNG supply chain.

ii. To develop maximal balancing capacity of the LNG supply chain starting from

FEED gas at upstream state, production, rounded-shape FLNG storage,

transportation and receiving terminal using simulation to meet optimal

production.

1.5 Project Questions

In order to achieve the rproject objectives mentioned above, the following

questions should be answered systematically.

How is Round Shape FLNG supply chain starting from FEED until

receiving terminal?

How to achieve optimal production output, capacity of round-shape FLNG

storage, transportation capacity and number of vessels needed by

considering Supply chain integration process?

What are alternative solutions to obtain an optimal capacity of FLNG

output, storage and carrier to meet demands?

What is the recommended solution to achieve optimal FLNG supply chain

from FEED to receiving terminal?

12

1.6 Expected Contributions of Research

This research will give contributions to FLNG companies to do planning,

operation and scheduling due to the changes of the LNG operation system.

For planning

Due to the increase of LNG demand and the global market competition

throughout the world, the demand will be fluctuated (uncertainty demand) it can

cause the company get difficulties in making decision on business investment.

However by using the designed simulation the company will be easier to see

various alternatives in decision making by modifying the existing simulation

before implementing it.

For operation

Efficient operation of LNG production is very important to get higher profit in

running the LNG business. In order to maximize the utilization of existing

facilities and find out the alternative improvements, using simulation is one of

the simplest ways, not only can visualize the process, but also show the

performances achieved by the facilities. From the information, the decision

maker can find as many as optimal alternatives as possible in order to get the

targeted profit. .

For Scheduling

Integration of every activity in the LNG supply chain of Round Shape FLNG is

very important. This project can help organizations or companies involved in

LNG supply chain operation.

13

1.7 Scope of Research

1. This project focuses on a LNG supply chain (SC) of Round Shape FLNG

starting from FEED, treatment process until receiving terminal that is from

Arapura Sea (Indonesia) to Osaka Receiving Terminal (Japan).

2. Only LNG product that was simulated in this project.

3. The receiving terminal was assumed in normal operation where the capacity

of the terminal can store all the delivered products.

1.8 Structure of Project

This report consists of six chapters, as summarized below:

Chapter 1 Introduction

Chapter 1 is the introduction of the study. This chapter explains about the research

statement, problem statement, objective of study, scope of study and matters that

have relate to the introduction of the project.

Chapter 2 Literature Review

Chapter 2 is the literature review of the project and contains on several topics related

to this study, describe definition, principle and approach used in conducting this

project. Topics reviewed include supply chain management optimization, strategic

supply chain optimization, design of supply chain, integration of supply chain,

supply chain in oil and gas, Floating LNG, Design of Experiment and Simulation

Modeling.

Chapter 3 Research Methodology

Chapter 3 which presents a feasible approach for achieving project’s goals.

14

Chapter 4 Case Study and Data Collection

This chapter is about the collected information related to the LNG Supply Chain

Chapter 5 Results and Discussion

Chapter 5 displays the result and data analysis using statistical analysis

Chapter 6 Conclusion

Chapter 6 consists of a summary of the whole study. Then, Findings of the research

are presented in brief. Finally, some future research is suggested.

1.9 Conclusion

This chapter highlighted a general introduction about the entire study. At the

beginning of this chapter, the introductions of supply chain management and supply

chain for LNG were briefly discussed. It was followed by the research statement and

the problems that this area is faced with. The objectives and scopes of the project

were stated to address the boundaries of the study. The significance of the study was

discussed. Lastly, the arrangement of the entire report was explained.

91

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