Optimal planning and infrastructure development for shale gas production

• A disjunctive programming model for optimal planning of shale gas is presented.
• The proposed model is suited for places without infrastructure.
• An economic objective is considered.
• Profitable scenarios have been identified in a case study from Mexico.

Recently, there has been a significant interest to the development and exploitation of unconventional gas resources especially shale gas. Several places around the world have substantial shale gas reserves in regions that lack in the infrastructure needed for production and distribution. This paper presents a new mathematical programming approach based on disjunctive programming to account for complex logical relationships in the optimal planning of shale gas exploitation and infrastructure development in places without infrastructure for production, treatment, and distribution. Because of the variability in natural gas supplies and demands over time, a multi-period optimization approach is adopted over a certain time horizon, which includes Monte Carlo simulations to assess the associated volatility. The optimization approach accounts for the different components of the infrastructure, the production schedules, and the time-value of money to maximize the net present value of the infrastructure. The applicability of the proposed approach is shown through a case study in the Burgos basin located in the Northeast of Mexico and in the southern extension of the Maverick Basin in Texas. The results show attractive economic results for the exploitation and distribution of gas to satisfy the national demand.