Applied Thermal Engineering 166 (2020) 114622

Contents lists available at ScienceDirect

Applied Thermal Engineering

journal homepage: www.elsevier.com/locate/apthermeng

Involving economic incentives in optimizing the methanol supply chain T

considering conventional and unconventional resources
Esbeydi Villicaña-Garcíaa, Mahmoud M. El-Halwagib, José María Ponce-Ortegaa,
⁎

a
Chemical Engineering Department, Universidad Michoacana de San Nicolás de Hidalgo, Av. Francisco J. Múgica S/N, Ciudad Universitaria, Edificio V1, Morelia,
Michoacán 58060, Mexico
b
Chemical Engineering Department, Texas A&M University, College Station, TX 77843-3122, United States

HIGHLIGHTS GRAPHICAL ABSTRACT

• Strategic planning to produce me-

thanol from unconventional and con-
ventional source.
• The involved uncertainty in the supply
chain is considered.
• Awork
multi-objective optimization frame-
was incorporated.
• Modeling economic incentives were
incorporated.

ARTICLE INFO ABSTRACT

Keywords: Recent discoveries of substantial reserves of natural/shale gas have spurred growth in the production of me-
Methanol thanol from natural gas. Such growth must entail the development of reliable infrastructures and supply chains.
Supply chain This paper presents a mathematical programming model for the strategic planning of the methanol supply chains
Natural gas to satisfy regional demands. To encourage utilization of local resources, economic incentives are considered. The
Uncertainty
uncertainties associated with the unit sale cost, supply of natural gas, and demand of methanol are incorporated.
Modelling economic incentives
Several sustainability objectives are included such as minimizing fresh water consumption, minimizing CO2
emissions, and maximizing profit. To illustrate the applicability of the devised methodology, a case study from
Mexico was solved with two schemes: Scheme A does not consider the uncertainty or economic incentives and
Scheme B considers uncertainty, economic incentives and restrictions on the importation of methanol. The
results show that by encouraging the national production of new methanol plants, the incentives generated are
up to 113% better than if the importation and production of the only existing plant in Mexico are used.

⁎
Corresponding author.
E-mail address: jmponce@umich.mx (J.M. Ponce-Ortega).

https://doi.org/10.1016/j.applthermaleng.2019.114622
Received 28 June 2019; Received in revised form 13 September 2019; Accepted 1 November 2019
Available online 04 November 2019
1359-4311/ © 2019 Elsevier Ltd. All rights reserved.
E. Villicaña-García, et al. Applied Thermal Engineering 166 (2020) 114622

Nomenclature , fa, un, t flowrate of natural gas obtained by shale, offshore, asso-
gfit , emet
ciated and non-associated production directed to produce
Sets methanol
, m, un, t flowrate of treated natural gas non-associated obtained by
cenoa mark
gfcn
C set for the different market of methanol considered to be conventional extraction directed to the markets
satisfied (c|c = 1,…,C) , fa, un, t flowrate of natural gas non-associated send to facilities of
cenoa met
gfcn
E set that represents the different process of extraction methanol
(e|e = shale, offshore, associated, non-associated) gpimp, m, un, t
mark
flowrate of imported natural gas directed to different
EP set for the existing plants of methanol (ep|ep = 1,…,EP) markets
F set for shale gas extraction field (f|f = 1,…,F) gpimp met
, fa, un, t flowrate of natural gas imported send to facilities of me-
FA set for new facilities to produce methanol (fa|fa = 1,…,) thanol
FCA set for associated conventional natural gas field Gfa NG fa
, un, t flowrate of natural gas needed to produce methanol
(fca|fca = 1,…,FCA) gfooff, m,tunmark
,t flowrate of natural gas produced in offshore extraction
FCN set for non-associated conventional natural gas field send to the markets
(fcn|fcn = 1,…,FCN) gfooff, fa,tunmet
,t flowrate of natural gas treated from offshore send to fa-
FO set for offshore extraction field (fo|fo = 1,…,FO) cilities of methanol
M set to indicate the market to which production is directed, gfshale
, m, un, t
t mark
flowrate of shale gas directed to markets
which can represent the importation facilities in the gfshale t met
flowrate of shale gas treated send to facilities of me-
, fa, un, t
country (m|m = 1,…,M) thanol
P set of different natural gas suppliers (p|p = 1,…,P) IEfa, un, t economic incentive for production of methanol in new
S set to represent the supplier of methanol (s|s = 1,…,S) facilities
T set of periods in years (t|t = 1,…,T) IE1fa, un, t economic incentive used in disjunction when the produc-
UN set of the different scenarios of uncertainty (u|u = 1,…,U) tion of methanol is equal to the proposed flowrate of
methanol in new facilities
Variables 2
IEfa, un, t economic incentive used in disjunction when the produc-
tion of methanol is greater to the proposed flowrate of
cea
Costun prod
production cost of natural gas through conventional methanol in new facilities
extraction associated 3
IEfa , un, t economic incentive used in disjunction when the produc-
Costun cenoa prod
production cost of natural gas through conventional tion of methanol is lower to the proposed flowrate of
extraction non-associated methanol in new facilities
Costun fresh acon
fresh water cost for associated conventional extraction ex
IEep, un, t economic incentive for production of methanol in existing
Costun fresh nacon
fresh water cost for non-associated conventional ex- facilities
traction Mfa, un, t Methanol produced in new facilities
Costun fresh shale
fresh water cost for shale gas M1fa, un, t methanol produced in new facilities used in disjunction
Costun imp
imported cost for natural gas when the production of methanol is equal to the proposed
Costun off prod
production cost of natural gas through offshore extrac- flowrate of methanol
tion 2
Mfa , un, t methanol produced in new facilities used in disjunction
Costun m exis
production cost of existing plants of methanol when the production of methanol is greater to the pro-
Costun m imp
production cost of imported methanol posed flowrate of methanol
Costun m prod
production cost of methanol in new facilities 3
Mfa, un, t methanol produced in new facilities used in disjunction
Costun pet
production cost of petroleum when the production of methanol is lower to the proposed
Costun transp met
transport cost of methanol flowrate of methanol
Costun shale prod
production cost of shale gas cap
M fa required capacity to produce methanol
, un
Costun seawater
seawater cost for offshore extraction exis
Mep, un, t methanol produced in existing plants
Costun transp ng
transportation cost of natural gas
Costun transp pet
transportation cost of petroleum
exis m
mep , c, un, t methanol produced in existing plants that is sent to the
Costun treatment cea
treatment cost for natural gas through conventional markets
Msimp imported methanol
extraction associated , un, t

Costun treatment off

treatment cost for natural gas and water used in msimp m
, c , un, t imported methanol that is sent to the markets
m
mfa methanol produced in new facilities that is sent to the
offshore extraction , c, un, t
markets
Costun treatment shale
treatment cost for shale gas and water used
mmmarket flowrate of methanol obtained by existing plants, new
Ef , e, un, t CO2 emissions generated in shale gas, offshore, associated , c, un, t
facilities and importation directed to different markets
and non-associated production
Eep exis
CO2 emissions in existing plants of methanol
Profitun profit
, un, t NG
Saleun sale of natural gas
Epimp CO2 emissions during natural gas importation
, un, t
TEun total emissions
Esimpm CO2 emissions during importation of methanol
, un, t TFWun total fresh water
E fanm
CO2 emissions in new facilities of methanol
, un, t
TIEun total economic incentive to produce methanol
Gft , e, un, t treated natural gas in shale, offshore, associated and non-
associated extraction
Binary Variables
cea t mark
gfca , m, un, t flowrate of treated natural gas associated obtained by
conventional extraction directed to the markets
y inc activation of disjunction when production of methanol in
, fa, un, t flowrate of natural gas associated send to facilities of
cea t met Aun,t
gfca
new facilities is equal to proposed production
methanol y inc activation of disjunction when production of methanol in
, m, un, t flowrate of natural gas obtained by shale, offshore, asso-
gfit , emark Bun,t
new facilities is greater to proposed production
ciated and non-associated production directed to different
y Cincun,t activation of disjunction when production of methanol in
markets
new facilities is lower to proposed production

2
E. Villicaña-García, et al. Applied Thermal Engineering 166 (2020) 114622

y inc - ex
Aun,t activation of disjunction when production of methanol in plants
current facilities is equal to proposed production UOCsm - imp unit operation cost for production of imported methanol
y inc - ex
Bun,t activation of disjunction when production of methanol in USM un,t unit sale cost of methanol
current facilities is greater to proposed production USNG un,t unit sale cost for natural gas
y Cincun,t- ex activation of disjunction when production of methanol in UTCcea fca,m unit transport cost of natural gas obtained in conventional
current facilities is lower to proposed production extraction associated
activation of new facilities of methanol UTCcea fca,fa unit transport cost for natural gas associated to produce
m -m
yfa , un
methanol
Parameters UTCcenoafcn.m unit transport cost of natural gas obtained in conventional
extraction non-associated
am unit fixed cost for new facilities of methanol UTCcenoafcn,fa
-m
unit transport cost for natural gas non-associated to
bm unit variable cost for new facilities of methanol produce methanol
cm exponent to consider the economies of scale for new fa- UTCexis ep,c
- mc
unit transport cost from existing plants of methanol to
cilities of methanol different markets
d cea
fca,m distance from the conventional extraction associated to UTCimp p,m unit transport cost of imported natural gas
market UTCimp p,fa
-m
unit transport cost for natural gas imported to produce
d cea -m
fca,fa distance from conventional extraction associated to facil- methanol
ities to produce methanol UTCimp s,c
- mc
unit transport cost from importation of methanol to
d cenoa
fcn,m distance from the conventional extraction non-associated different markets
to market UTCmc fa,c unit transport cost from new facilities of methanol to dif-
d cenoa
fcn,fa
-m
distance from conventional extraction non-associated to ferent markets
facilities to produce methanol UTCoff fo,m unit transport cost of natural gas obtained in offshore ex-
d exis
ep,c
- mc
distance from existing plants of methanol to the markets of traction
methanol UTCoff fo,fa
-m
unit transport cost of natural gas from offshore to produce
d imp
p,m distance from importation to market methanol
d imp
p,fa
-m
distance from importation of natural gas to facilities to UTCoff fo
- sea
unit transport shipping cost for natural gas obtained in
produce methanol offshore extraction
d imp
s,c
- mc
distance from importation of methanol to the markets of UTCoff fo,fa
- sea - m
unit transport shipping cost for natural gas from off-
methanol shore to produce methanol
d mc
fa,c distance from new plants of methanol to the markets of UTCpfca- cea unit transport cost of petroleum obtained in conventional
methanol extraction associated
d off
fo,m distance from the port in offshore to market UTCpfo- off unit transport cost of petroleum obtained in offshore ex-
d off -m
fo,fa distance from offshore extraction to facilities to produce traction
methanol UTCpfo- off - sea unit transport shipping cost for petroleum obtained in
d off
fo,m
- sea
distance from offshore extraction field to port offshore extraction
off - sea - m
d fo,fa distance from offshore extraction field to port for pro- UTCtran f,m
- shale
unit transport cost in shale gas
duction of methanol UTCtran f,fa
- shale - m
unit transport cost of shale gas to produce methanol
d shale
f,m distance from shale gas extraction to market v parameter used in disjunction when production of me-
d shale
f,fa
-m
distance from shale gas extraction to facilities to produce thanol is lower to proposed production
methanol x parameter used in disjunction when production of me-
GNG - mark
m,un,t total natural gas required thanol is greater to proposed production
IEMAX
maximum economic incentive for production of methanol e emission factor for shale, offshore, associated and non-
in new facilities associated extraction
IEp economic incentive proposed for production of methanol
exist
ep, c emission factor for existing plants of methanol
kF factor used to annualize capital costs imp emission factor for natural gas from importation
Mexiso
ep,t target production of methanol of the existing plants impm
s, c emission factor for imported methanol
Mexisp
ep,t production of methanol proposed by the existing facilities nm
fa, c emission factor for new facilities of methanol
Mmarket
un,t demand of methanol markets that needs to be satisfied e
t
emission factor for natural gas treatment from shale, off-
MMAX
fa maximum production of methanol in new facilities shore, associated and non-associated extraction
Mmaxcap
ep maximum capacity of production of existing plants value used in disjunction to make slight difference in
Mofa,t target production in new plants of methanol equalities
Mpfa,t production of methanol proposed by the new facilities
Sale M methanol sale Abbreviations
un
u parameter used in disjunction when production of me-
thanol is equal to proposed production EP existing plants of methanol
UOCm unit operation cost for production of methanol in new NF new facilities of methanol
fa
facilities TE total emissions of CO2
UOCm - exis
unit operation cost for production of methanol in existing TFW total fresh water
ep

1. Introduction
Methanol is an essential chemical with a global production capacity
of about 110 million metric tons per annum “MTPA” [1]. Various
chemicals may be derived from methanol. Examples include olefins,
dimethyl ether, formaldehyde, acetic acid, methyl tert-butyl ether, ga-
soline, methyl methacrylate, methyl chloride, and methylamines [2].
Methanol has also been employed for a variety of applications, covering
the production of pigments, plastics and paints, as solvent, wastewater
denitrification, biodiesel production, electricity generation by driving

3
E. Villicaña-García, et al.
turbines and hydrocarbon production [3]. Olah [4] proposed the use of
methanol as a (1) convenient energy-storage material, (2) a fuel and (3)
a feedstock to synthesize hydrocarbons and their products as a me-
thanol economy.
A world-scale methanol plant produces 5000 metric tons per day by
reforming natural gas with steam and then putting the resulting
synthesis gas through conversion into liquid methanol [1]. Based on
these reasons, it is important to consider the use of natural gas to
produce value-added products instead of only using it to burn and
generate energy.
Various investigations have been carried out to consider the use of
methanol. In this sense, methanol may be manufactured from different
feedstocks and through several pathways. A particularly attractive
pathway exploits the shale gas boom. Methane may be reformed into
syngas which is subsequently converted into methanol [5]. Ad-
ditionally, CO2 may be effectively sequestered to produce methanol.
There are different methods for the capture and use of CO2, Zhang et al.
[6] analyzed and described Carbon Capture and Utilization (CCU) using
nanotechnology to control gas pollution. Ehlinger et al. [7] developed a
process synthesis, simulation, and integration of a shale gas to methanol
plant. Julián-Durán et al. [8] developed a technical, economic, and
environmental assessment of methanol production from shale gas. From
natural gas via methanol, it can be produced benzene, toluene, or xy-
lenes, to address this, Niziolek et al. [9] developed a process synthesis
framework to compare several commercial and promising technologies
to produce aromatics from natural gas. It should be noticed that pre-
vious approaches only considered the simulation process for the me-
thanol production without involving the associated supply chain.
The strategic planning of fuels and chemicals must integrate all
aspects of supply chain. Hamedi et al. [10] presented an integrated
multi-period optimization model for the distribution planning in dif-
ferent stages of natural gas supply chains. It is important to know the
consumption of natural gas for its correct distribution, in this sense,
Sabo et al. [11] provided an efficient model to predict the hourly
consumption of natural gas. Furthermore, Ponce-Ortega et al. [12]
proposed a general disjunctive programming formulation for the op-
timal configuration of a biorefinery. Bianco et al. [13] analyzed re-
sidential natural gas consumption as well as the impact of some effi-
ciency measures on future consumption to design appropriate supply/
consumption strategies and energy policies. Also, Gao and You [14]
formulated a model for the design and operation of shale gas supply
chain networks accounting for economic and environmental impacts.
Garcia and You [15] identified opportunities and challenges in supply
chain design. Drouven and Grossmann [16] presented a model to ad-
dress the long-term shale gas development problem given a super-
structure that reflects real world gathering systems. Arredondo-Ramírez
et al. [17] proposed a mathematical programming model to determine
the optimal planning and scheduling for the natural gas production
from shale gas plays in places without infrastructure. Balcombe et al.
[18] studied methane and CO2 emissions from the natural gas supply
chain. Furthermore, Martinez-Gomez et al. [19] studied the production
of syngas from shale gas considering risk assessment. Sustainability and
safety issues have been incorporated in the development and assess-
ment of manufacturing facilities and associated supply chains [20]. Gao
and You [21] developed a life cycle optimization framework for the
sustainable design and operation of shale gas supply chains and product
systems with noncooperative stakeholders. It must be pointed out that
the aforementioned works have focused only on the natural gas supply
chain, without considering the methanol production.
Because of the uncertainties involved in various economic, supply
and demand aspects of the methanol supply chains, it is necessary to
take into account the variability in the strategic planning of the
4
Applied Thermal Engineering 166 (2020) 114622
processes. You and Grossmann [22] considered the design of a re-
sponsive supply chain with integration of inventory and safety stocks
under uncertain demand. Guillén-Gosálbez et al. [23] proposed the
optimal design and planning of sustainable chemical processes. Awudu
and Zhang [24] discussed the uncertainties in biofuel supply chain and
provided some modeling methodologies including sustainability issues.
Baghalian et al. [25] developed a stochastic model for designing a
network structure for a supply chain, which includes several production
facilities, distribution centers and retailing facilities by considering
both demand-side and supply-side uncertainties. Martín and Martínez
[26] considered the design of the production process and the final
product under uncertainty on the formulation of the product and as a
result it can be determined the composition of the final products, their
performance, environmental impact and cost. Mukherjee et al. [27]
accounted for the uncertainty of water distribution networks supporting
industrial systems. Mukherjee and El-Halwagi [28] addressed the re-
liability issues in designing symbiosis networks and supply chains under
stream uncertainty. Gao et al. [29] reported an optimization approach
for shale gas supply chains under uncertainty. Ehrenstein et al. [30]
proposed a methodology to optimize supply chains threatened by rare
event disruptions, such as extreme weather events, in terms of eco-
nomic and risk performances. Similarly, it is important to create eco-
nomic incentives to promote production in the different production
lines, in this sense Santibañez-Aguilar et al. [31] proposed a mathe-
matical programming model for the sustainable elimination of water
hyacinth through a distributed biorefining network using tax credit
restrictions to make the strategy economically attractive. Also, Pang
et al. [32] developed an economic compensation assessment model to
establish an economic compensation standard by taking into con-
sideration agricultural losses resulting from the maintenance of en-
vironmental flows for ecosystems. Fuentes-Cortés et al. [33] proposed a
methodology for determining the utility pricing, considering regulated
market limitations from developing countries, linked to the design of
the water-energy system. It should be noted that none of the references
mentioned above have studied the use of economic incentives in the
optimization of methanol supply chains.
This paper presents a mathematical programming model to optimize
a strategic planning regarding the production of methanol. The pro-
posed mathematical model is general, this means that it can be applied
to any case with the corresponding data. The idea of the manuscript is
to present a tool able to provide options for decision makers at in-
dustrial level for investing in a new supply chain for methanol pro-
duction from different sources of natural gas. Emphasis is given to sa-
tisfying methanol demands in a given region or country from natural
gas obtained through unconventional forms such as offshore extraction
or shale gas production as well as conventional forms of extraction with
the objective of gas achieving self-sufficiency. The use of economic
incentives is introduced to support regional economic growth and avoid
imports. Additionally, the uncertainties associated with the demand for
natural gas and methanol as well as the unit sale cost of both products
are considered.
2. Problem statement
The problem addressed in this paper is defined as follows: There is a
certain region with specific production of natural gas (GNG - mark
m,un,t ) to meet
the demands for each market m, given different fields (f, fo, fca, fcn) for
conventional and unconventional extraction (Gfshale , un, t , Gfo, un, t , Gfca, un, t ,
off cea
, un, t ), and different suppliers p of natural gas imported (Gp, un, t ); as
cenoa
Gfcn imp
well as contemplating the natural gas needed to produce methanol
(Gfa , un, t ) for each production plant fa. Also, there is a given availability
NG fa
E. Villicaña-García, et al. Applied Thermal Engineering 166 (2020) 114622

of water sources (Wf , un, t shale , W fosea, un,off

t , wfca, un, t
fresh acon
, wfcn
fresh nacon
, un, t ) for the mathematical programming model for the optimization of the complete
production of natural gas. In addition, the demand for methanol supply chain associated with the methanol production. The mathema-
(Mmarket
c,un,t ) needs to be satisfied for each market of methanol c, which is tical model for the natural gas supply chain is similar to the previous
met through the importation (Msimp , un, t ) of each supplier s, from the pro- one reported by Villicaña-García and Ponce-Ortega [34], which ac-
duction of existing methanol plants (Mep , un, t ) for each existing plant ep
exis
counts for extraction, production and treatment of natural gas by un-
and the installation of new production plants (Mfa, un, t ), everything is conventional forms such as shale gas and offshore extraction, as well as
done referring to period of time t in years. It is also considered the conventional forms of associated and non-associated natural gas, in
uncertainty un associated to the availability of natural gas, methanol addition to the importation of natural gas, which is presented in detail
demand, as well as to the unit costs of natural gas (USNG un,t ) and methanol in the supplementary material. Next section presents the new re-
(USM un,t ). In addition, the generation of CO 2 (TE un ) is considered for each lationships associated with the methanol supply chain.
of the involved processes.
The problem consists in determining the optimal configurations and
operation for satisfying the methanol and natural gas demands in a 3.1. Total natural gas
given region considering the costs associated with the treatment, pro-
duction and distribution of natural gas and methanol, besides the sale of 3.1.1. Distribution to markets
natural gas (Sale NG un ), petroleum (Saleun ) and methanol (Sale un ); as well
PET M
The treated natural gas () in each field of extraction fi obtained by e
as promoting the national production of methanol through economic (shale, offshore, associated and non-associated production) can be
incentives in existing and new facilities (IEfa, un, t , IEep ex
, un, t ), having as , m, un, t ) for the cities m and for the
distributed in different markets (gfit , emark
objective functions to maximize the Profit, minimize the consumption of facilities fa to produce methanol gfit , emet
, fa, un, t :
fresh water TFW and minimize the total emissions TE.
Gfit , e, un, t = gfit , emark
, m, un, t
+ gfit , emet
, fa, un, t
, fi , e, un, t
m fa (1)
3. Optimization model
Likewise, the treated natural gas imported (Gpimp , un, t ) is distributed to
The proposed mathematical model is based on the superstructure
the different markets ( gpimp
, m, un, t , gp, fa, un, t ):
mark imp met
shown in Fig. 1, which represents the problem and involves all the
possibilities of interest to solve it. Different conventional and un-
Gpimp
, un, t = gpimp mark
+ gpimp met
, p, un, t
conventional forms of natural gas production are considered, which , m, un, t , fa, un, t
m fa (2)
take into account their extraction, treatment and distribution; then,
natural gas is used to produce methanol, this methanol can be obtained
through existing plants, new production facilities or by importation.
The obtained methanol is distributed to different markets. The demand 3.1.2. Natural gas in each market
of natural gas and methanol must be met, in addition the costs asso- Natural gas is needed in cities (GNG - mark
) and to produce methanol
m,un,t
ciated with production, treatment and distribution as well as the con- (Gfa, un, t NG fa ); in the case of the necessary natural gas for the cities, it
sumption of fresh water and CO2 equivalent emissions to the atmo- can be satisfied through treated shale gas ( gfshale t mark
), treated natural
sphere are considered. , m, un, t
gas from offshore extraction ( gfooff, m,tunmark ) or from associated conven-
Previous works have been reported for the strategic planning asso- ,t

ciated to the natural gas supply chains; however, the entire methanol tional extraction ( gfca , m, un, t ), by non-associated conventional extrac-
cea t mark

supply chain has not been addressed. Therefore, this paper presents a tion (gfcn, m, un, t ) and by imports ( p, m, un, t ):
cenoa mark
g imp mark

Fig. 1. Proposed superstructure for optimizing the methanol supply chain.

5
E. Villicaña-García, et al. Applied Thermal Engineering 166 (2020) 114622

GNG - mark
m,un,t
new methanol plant, it is multiplied by a binary variable yfa
m
, un times the
maximum allowed capacity:
= gfshale t
, m, un, t
mark
+ gfooff, m,tunmark
,t + cea t mark
gfca , m, un, t + cenoa mark
gfcn, m, un, t +
cap
f fo fca fcn M fa , un MMAX
fa
m
· yfa , un , fa , un (8)
gpimp mark
, m, un, t , m, un, t
p (3) Also, it is necessary to know the maximum flow of methanol Mfa, un, t
that will serve as the required capacity for installation M fa
cap
, un :
The same applies for the natural gas Gfa , un, t to produce methanol:
NG fa
cap
M fa , un Mfa, un, t , fa, un, t (9)
NG fa
Gfa, un, t

= gfshale t
, fa, un, t
met
+ gfooff, fa,tunmet
,t +
cea t met
gfca , fa, un, t +
cenoa met
g fcn, fa, un, t + 3.2.3. Cost of production
f fo fca fcn
The production cost for the new facilities Costun m prod
of methanol
gpimp met
, fa, un, t , fa, un, t UOCm fa · Mfa, un, t is calculated through the operating cost plus the capital
(4) cost am· yfa cap cm
, un ) :
p m
+ bm (M fa

m prod cap c m
3.1.3. Transport cost Costun = UOCm m m m
fa ·Mfa, un, t + kF·(a · yfa, un + b (M fa, un ) ) ,
The transport cost for distribution of natural gas (Costun transp ng
) to the fa t

different markets in the case of sending natural gas to the cities m is un (10)
given by the unit transport cost (UTCtran f,m
- shale
) multiplied by the dis-
tance from the point of extraction to the market (d shale f,m ) and multiplied 3.3. Operating costs for the existing methanol plants
by the flow of obtained natural gas ( gfshale t mark
, m, un, t ), either by extraction of
shale gas, by offshore extraction, associated and non-associated con- The production cost Costunm exis
is calculated by the multiplication of
ventional extraction and by imports plus the cost of transporting the the unit cost UOCep
m - exis
times the flow of the current flow of methanol
natural gas to the facilities fa to produce methanol:
, un, t :
exis
Mep
UTCtran - shale ·dshale· g shale t mark m exis
f,m f,m f , m, un, t Costun = UOCm
ep
- exis exis
·Mep , un, t , un
f
off - sea off - sea off t mark
ep t (11)
+ (UTCoff off
fo,m ·dfo,m + UTC fo,m ·dfo,m )·g fo, m, un, t
transp ng
Costun =
fo
Also, the production cannot be greater than the maximum
exis
Mep , un, t
UTCcea cea cea t mark + UTCcenoa cenoa cenoa mark
m t +
fca
fca,m ·dfca,m · g fca, m, un, t
fcn
fcn,m ·dfcn,m · g fcn, m, un, t capacity Mmaxcap
ep of the existing plant:
UTC imp imp imp mark exis
Mmaxcap
+
p
p,m ·dp,m · gp, m, un, t Mep , un, t ep , ep , un, t (12)
UTCtran - shale - m ·dshale - m · g shale t met
f,fa f,fa f , fa, un, t
3.4. Importation cost of methanol
f

+(UTCoff - m off - m off - sea - m ·doff - sea - m)· g off t met

fo,fa ·dfo,fa + UTC fo,fa fo,fa fo, fa, un, t
fo
+
fa t + cea - m cea - m cea t met
UTC fca,fa ·dfca,fa ·g fca, fa, t + UTCfcn,fa ·dfcn,fa - m·g fcn
cenoa - m cenoa cenoa met
, un
The importation cost Costun m imp
is determined through the operating
, fa, un, t
fca fcn cost UOCsm - imp
· Ms, un, t :
imp

+ UTC imp p,fa

- m imp - m imp met
·dp,fa ·gp, fa,un, t
p m
Costun imp
= UOCm
s
- imp
·Msimp
, un, t , un
(13)
(5) s t

3.1.4. Natural gas sale 3.5. Distribution of methanol

The obtained natural gas is sold (Saleun NG
), this sale is calculated by
multiplying the unit sale price (USNG ) times the required natural gas The methanol produced by new facilities Mfa, un, t , importation Msimp , un, t
un,t
flow (Gm,un,t NG - mark + Gfa, un, t NG fa ): and existing plants Mep , un, t can be sent to different markets, in each case
exis

(mfa
m
, c, un, t , ms, c , un, t , mep, c, un, t ):
imp m exis m

NG m
Saleun = USNG
un,t · Gm,un,t NG - mark + Gfa, un, t NG fa , un Mfa, un, t = mfa, c , un, t , fa , un, t
t m fa (6) c (14)

Msimp
, un, t = msimp m
, c, un, t , s, un, t
(15)
3.2. New methanol facilities c

exis exis m
Mep , un, t = mep, c, un, t , ep, un , t
3.2.1. Production of methanol c (16)
The production of methanol Mfa, un, t must be determined according
The produced methanol Mmarket needs to be sent to the different
to the natural gas Gfa , un, t sent to each facility fa multiplied by a con-
NG fa un,t
markets mmmarket :
version factor (m3 methanol per m3 natural gas): , c, un, t

NG fa Mmarket
c,un.t =
m
mfa , c, un, t + msimp m
, c, un, t +
exis m
mep, c, un, t , c, un, t
Mfa, un, t = · Gfa , un, t , fa, un , t (7) fa s ep (17)

3.2.2. Activation of the location of new plants of methanol 3.6. Transport cost of methanol
The capacity of installation M fa , un cannot be greater than a max-
cap

imum production of methanol Mfa . To determine the existence of a

MAX
The transport cost of methanol Costun
transp met
is determined in the

6
E. Villicaña-García, et al. Applied Thermal Engineering 166 (2020) 114622

case of new facilities by multiplying the unit transportation cost UTCmc fa,c p:
times the distance d mc
fa,c between the facility of production to the market
that requires methanol and the flow of methanol sent mfa Epimp
, un, t =
imp ·Gimp , p, un, t (23)
, c, un, t ; also
m p, un, t
considering transport associated to importation and existing plants:
Emissions in the new plants of methanol E fa
nm
, un, t , importation Es, un, t
impm

UTCmc mc m
fa,c ·d fa,c · mfa, c, un, t and associated to the current production of methanol Eep exis
, un, t is also
fa taken into account:
transp met
Costun = + UTCimp
s,c
- mc imp - mc
·d s,c ·msimp m
, c, un, t , un nm nm
s E fa, un, t = fa, c ·Mfa, un, t , fa , un, t
c t (24)
+ UTCexis
ep,c
- mc exis - mc exis m
·d ep,c · mep , c, un, t
c
ep (18)
Esimpm
, un, t =
impm
s, c · Msimp
, un, t , s, un , t
c (25)
3.7. Methanol sale
exis exist exis
Eep , un, t = ep, c ·Mep, un, t , ep , un, t
The sale of methanol Sale M (26)
un is calculated by the multiplication of the
c

unit sale USM

un,t price times the required methanol Mc,un,t :
market
The total emissions (TEun ) are the sum of the generated emissions in
each involved process:
Sale M
un = USM
un,t · Mmarket
c,un,t , un
(19)
off
t c Efshale
, un, t + E fo, un, t +
acon
E fca, un, t +
nacon
Efcn, un, t + Epimp
, un, t
f fo fca fcn p
TEun = , un
t + nm
Efa, un, t + Esimpm
, un, t +
exis
Eep, un, t
3.8. Profit fa s ep

(27)
The profit (Profitun ) is obtained by the sum of the sale of oil, natural
gas and methanol, plus the economic incentives to produce methanol
(IEun ) minus all the involved expenses: 3.11. Economic incentive for the production of methanol

PET
Saleun + SaleNG M
un + Sale un + TIEun
shale
Costun prod
With the intention to encourage the local or national production of
fresh shale
Costun treatment shale
Costun methanol and to avoid external dependence through imports, in this
off prod seawater treatment off cea prod
paper a strategy based on economic incentives is considered. In this
Costun Costun Costun Costun
sense, the Gonik-IBM incentive scheme is implemented in the methanol
Profitun = fresh acon
Costun treatment cea
Costun supply chain considered (Control and economic incentives for agents
cenoa
Costun prod fresh
Costun nacon imp
Costun pet
Costun [35]). It consists of establishing a production level that is reasonable,
transp pet transp ng high and reliable to meet Mpfa,t , which each new plant is committed to
Costun Costun
reach. Thus, an objective of methanol production must also be de-
m prod m exis m imp transp met
Costun Costun Costun Costun termined (Mofa,t ), this needs to be different for each new plant since it
, un (20) will depend on the geographical location as well as the demands of each
zone. In addition, a certain base incentive is established IEp that is the
same for all production plants. The parameters u, v and x are estab-
3.9. Total fresh water lished. There are three cases, the first one is when the methanol pro-
duction equals the expected methanol production and in this way the
The total used fresh water (TFWun ) is the sum of each flow needed of base incentive is obtained; the second case is when the production
water in shale, conventional associated and non-associated production: exceeds the expected production and then compensates with a greater
fresh acon fresh nacon incentive to the base incentive; and the third case is when the expected
TFWun = W fshale
, un, t + wfca + wfcn , un
f t fca t
, un, t
fcn t
, un, t
production is not reached and therefore the economic incentive is pe-
nalized for not having achieved that goal.
(21)
A disjunction is used to model the three cases mentioned above.
Boolean variables are used, which allow to select only one of the cases.
3.10. Total emissions For new methanol plants, it is formulated as follows:

The generated CO2 emissions (Efi, e, un, t ) in each field fi are de- Yinc
Aun,t YBincun,t
termined through the multiplication of the factor e that involves the Mfa, un, t = Mpfa,t Mfa, un, t > Mpfa,t
m3 of CO2 generated by m3 of natural gas produced, multiplied by the Mp (Mfa, un, t + Mpfa,t )
flow of obtained natural gas (Gfi, e, un, t ) and the emissions generated from IEfa, un, t = IE p ·u· Mfa,t
o IEfa, un, t = IEp ·x· 2·Mofa,t
fa,t
the treatment of natural gas ( et · Gfit , e, un, t ). This is calculated for each
process of extraction e (e = shale gas, offshore and natural gas asso- YCincun,t
ciated processes; when e = non-associated natural gas, et · Gfit , e, un, t = 0 ): Mfa, un, t < Mpfa,t
, fa , un, t
t t Mpfa,t )
Efi, e, un, t = e· Gfi, e, un, t + e ·Gfi, e, un, t , fi , e, un , t (22) IEfa, un, t = IE p ·v·
(3·Mfa, un, t
2·Mofa,t
(28)
Also, the importation of the natural gas implies CO2 emissions
(Epimp
, un, t ) (in the pumping stations), according to the amount of trans- The reformulated disjunction through a set of algebraic relation-
ported natural gas (Gpimp , un, t ) multiplied by a factor
imp for each supplier ships is the following (see, Ponce-Ortega et al. [36]):

7
E. Villicaña-García, et al. Applied Thermal Engineering 166 (2020) 114622

y inc inc inc

Aun,t + y Bun,t + y Cun,t = 1, un, t (29) 3.13. Solution approach

Mfa, un, t = M1fa, un, t + Mfa

2 3
, un, t + Mfa, un, t , fa, un, t (30) The parameters that are under uncertainty correspond to the de-
mand and sale costs of natural gas and methanol. Through the MATLAB
IEfa, un, t = IE1fa, un, t + IEfa
2 3
, un, t + IEfa, un, t , fa , un, t (31) software, the “randn” command was used to generate random values
considering the percentage of the standard deviation (Table 1) for each
M1fa, un, t = Mpfa,t ·y inc
Aun,t , fa, un , t of the parameters according to historical values reported in databases
(32)
(Methanol Institute [1], EIA [37], Methanex [38]). In addition, the
Mpfa,t equations of the model that are affected by the indicated parameters
IE1fa, un, t = IE p ·u· o ·y inc , fa, un, t were identified and to consider the uncertainty in the proposed math-
Mfa,t Aun,t (33)
ematical model, the “un” set was used, which represents the different
2
Mfa (Mpfa,t )·y inc scenarios generated in MATLAB. Once having these values, they were
, un, t Bun,t , fa, un, t (34) included in GAMS and different scenarios were solved by maximizing
2 p inc the mean Profit that is calculated through Eq. (47) and represents the
(Mfa, un, t + M fa,t ·y B un,t )
2
IEfa p sum of the objective functions obtained between the number of “un”
, un, t = IE ·x· , fa, un, t
2·Mofa,t (35) scenarios considered.
3
Mfa (Mpfa,t + )·y Cincun,t , fa, un, t Profit
, un, t (36) un
mProfit =
un (47)
3
(3·Mfa , un, t Mpfa,t ·y Cincun,t )
3
IEfa , un, t = IE p ·v· , fa, un, t
2·Mofa,t (37)
4. Case study
M1fa, un, t MMAX
fa ·y inc
Aun,t , fa, un, t (38) The methanol industry is present all over the world (Fig. 2). There
2 are more than 90 methanol plants worldwide with a total production
Mfa MMAX ·y inc
Bun,t , fa, un, t (39)
, un, t fa
capacity of more than 75 million metric tons. Every day more than
3
100,000 tons of methanol are used as raw material in the chemical
Mfa MMAX ·y Cincun,t , fa, un, t (40)
, un, t fa industry or as fuel for transportation. The global methanol industry
generates 36 billion dollars and creates more than 100,000 jobs
IE1fa, un, t IEMAX ·y inc
Aun,t , fa , un, t (41) worldwide [1].
To prove the methodology, it is applied to a case study in Mexico,
2
IEfa, un, t IEMAX ·y Bincun,t , fa, un, t (42) however, the proposed model is general and it can be applied to any
location around the world. Furthermore, methanol is a very important
3
IEfa , un, t IEMAX ·y Cincun,t , fa, un, t (43) feedstock for several industries, and one of the main problems is asso-
ciated to the considered raw material. Therefore, the proposed ap-
The corresponding disjunction for existing methanol plants is the proach can be used for the strategic planning for methanol production
following: in different parts considering the proper conditions and available re-
sources of the selected region. The national demand for methanol in
Yinc - ex
Yinc - ex
Aun,t Bun,t Mexico is 2,760,000 Ton/y [39]. Currently, there is only one Methanol
production plant that uses natural gas as raw material, which is not
exis exisp exis exisp
Mep , un, t = Mep,t Mep , un, t > Mep,t

Mexisp exis
(Mep exisp
, un, t + Mep,t )
enough to satisfy the demands of the country using their own resources,
ex ep,t ex
IEep, un, t = IE p ·u· exiso IEep p
, un, t = IE ·x· due to this more than 80% is satisfied through importation [40]. Be-
Mep,t 2·Mexiso
ep,t
cause of this, it is interesting to address the strategic planning of me-
YCincun,t- ex thanol in cases where infrastructure is not enough and where the
exis
Mep, un, t < Mexisp
ep,t
country has the raw material sources necessary for its production, ei-
, ep , un, t
ther through conventional or unconventional forms of natural gas or
exis
(3·Mep Mexisp
ep,t )
other fossil fuels. In this paper, it is proposed the installation of new
ex , un, t
IEep , un, t = IE p ·v·
2·Mexiso
ep,t (44) methanol production plants that are distributed throughout the country
Which is algebraically reformulated as it is shown in the electronic and can be built near the cities with the greatest demand or near the
supplementary material. natural gas production plants. In addition, to encourage national pro-
The total economic incentive (TIEun ) corresponds to the sum of in- duction and make the construction of new methanol plants more at-
centives in new facilities (IEfa, un, t ) plus the incentives in existing plants tractive, economic incentives issued by the government are in-
(IEep
ex
, un, t ):
corporated. In this way, the methanol plants establish an objective
production that if achieved, the economic incentive set by the gov-
ex
TIEun = IEfa, un, t + IEep , un, t , un ernment is obtained, if the production exceeds the objective production,
fa t ep t (45) the incentive generated will be greater, on the other hand, if the pro-
duction is not fulfilled, there will be a penalty; based on this the
3.12. Objective functions
Table 1
Percentage of standard deviation used.
The formulation of the mathematical programming model is a
multi-objective problem, where the objectives are to maximize the Concept % Standard Deviation
profit, minimize the consumption of fresh water and minimize the total
Natural Gas Unit Sale Cost 0.3406
emissions, subject to relationships (1)–(45), as well as equations (S1- Methanol Unit Sale Cost 0.3476
S58) reported in the supplementary material section: Natural Gas Demand 0.1775
Methanol Demand 0.4389
ObjectiveFunction = MaxProfit ; MinTFW ; MinTE (46)

8
E. Villicaña-García, et al. Applied Thermal Engineering 166 (2020) 114622

Table 2
List of cities considered in the different sets.
New Facility, FA Existing plant, Supplier, S Market, C
EP

Acapulco de Juárez Puebla Productos Químicos Juarez

Monterrey
Aguascalientes Abaquim Monterrey
Chihuahua Flash Chemicals of Tijuana
Mexico
Guadalajara ISSE LABS Mexico City
León Avantor Reynosa
Mexicali Spectrum Querétaro
Monterrey Química Tech Saltillo
Morelia Guadalajara
Puebla Guanajuato
Querétaro Toluca
Saltillo San Luis Potosí
San Luis Potosí Puebla
Tijuana Aguascalientes
Toluca
Tuxtla Gutierrez
Veracruz
Juarez
Mexico City
Reynosa
Guanajuato
Fig. 2. Distribution of global methanol production. Comitas
Sabinas Hidalgo
Cuitlahuac
objective production in the methanol plant must be reliable and
achievable.
The fact of being able to use raw material from national reserves areas in Mexico. It is proposed to build new methanol production plants
(natural gas) to produce value-added components, leads to the in- that use natural gas in 23 different locations throughout the country. In
stallation of new production plants and thus helps both the economic Mexico there is only one methanol production plant from natural gas
and industrial development of the country; it is important to note that it located in Puebla with a production capacity of 186,150 Ton/y, the
is proposed to provide economic incentives to promote national pro- remaining demand is satisfied through different suppliers or by im-
duction. In addition, a different use is given to natural gas apart from portation. The cities considered are shown in Fig. 3 and Table 2.
burning it to produce energy.
In the case of the methanol supply chain, it needs to meet the me-
thanol demand of 13 cities that represent the most important industrial

Fig. 3. Location of cities considered.

9
E. Villicaña-García, et al. Applied Thermal Engineering 166 (2020) 114622

5. Results
Different schemes were analyzed to determine the behavior of the
model. In scenario A, results are obtained without taking into account
the uncertainty and the use of economic incentives providing extreme
scenarios, these results are used to compare the ones of Scenario B and
help to determine the limits of solution for the problem. Scenario B, on
the other hand, includes the uncertainty associated with the demands
and sale costs of natural gas and methanol, the use of economic in-
centives, analyzes different scenarios limiting the importation of me-
thanol to help with national production, and to propose infrastructure
for new methanol plants.
5.1. Scenario A
The results are obtained without considering the uncertainty and
use of economic incentives. The mathematical model was solved for
each objective function and it represents extreme solutions for each of
the cases.
As it can be seen in Table 3, the profit has a large difference between
maximizing Profit and minimizing TFW and TE, even though, in the last
two objectives the expenses are higher than the profit, then there are
losses due to the fact that all the natural gas and methanol are im-
ported. On the other hand, total emissions generated by minimizing the
TFW are 82.1% less than maximizing the profit and when TE is mini-
mized, the emissions are 82.8% fewer than in the case of maximizing
the profit.
All the consumption of fresh water happens when maximizing the
Profit because there is no use of natural gas importation, in this way,
the production of natural gas needs to be made, but by minimizing TFW
and TE all natural gas is imported. It is interesting to point out that the
highest consumption of water is when conventional extraction is made,
this is because even though shale gas production uses huge amounts of
water, the ratio of MMm3 of water used per MMcfy of natural gas
produced is better than conventional ways of extraction under the
considered conditions.
To satisfy the natural gas demands, by maximizing Profit, 65.8% is
through shale gas production, 16.25% using offshore extraction, there
is no use of importation and the rest is using conventional ways of
extraction.
The 93.3% of petroleum is produced using offshore extraction and
since what varies is the importation of methanol due to it is still the
most viable option to maximize the Profit. By maximizing the mean
profit, importation or production in plants that do not use natural gas
will always be resorted to and thus ensuring greater profit since na-
tional production from natural gas implies expenses due to the capital
and operating costs. It should be pointed out that when there is few
national methanol production of the existing plant, the economic in-
centives are very low, otherwise, by not achieving the objective pro-
duction of the new plants, the economic incentives are penalized,
having negative values (Fig. 6); On the other hand, the production of
the existing plant works at its maximum capacity under the different
scenarios and the economic incentives are the same. This way, it is
decided to restrict the import of methanol with the intention of pro-
moting national production and to create new facilities of methanol.
When restricting the importation of methanol by 25%, economic
incentives for production in new methanol plants are used (Fig. 7).
Since the production of existing plants is constant due to the maximum
capacity of the plant, the incentives generated are constant, however, in
the case of new plants, the economic incentive granted depends on the
level of production achieved. Regarding the production of natural gas,
by restricting the importation of methanol, it is not affected. On the
other hand, because there is a maximum capacity in the existing me-
thanol plant, production in new plants is used (Fig. 8) to satisfy me-
thanol demand when importation is limited.
By restricting the import of methanol, by 25, 50 and 75%, it can be
noted in Fig. 9 that the behavior of the Profit is the same in the different
percentages of restriction. When the import decreases, the national
production of methanol increases (Fig. 10), therefore the incentives
granted are greater (Fig. 11), also emphasizing that when national
production is lower, the total incentives are penalized in a more radical
way, as it is the case of restricting only 25% of methanol imports
compared with the case of restricting 75%.
Regarding CO2e emissions, by reducing imports, the national pro-
duction increases and, therefore, emissions are higher, however, the
behavior is similar at different levels of restriction of importation of
methanol, as can be seen in Fig. 12. On the other hand, the difference in
Table 3
Results for Scenario A.
Max PROFIT Min TFW Min TE

the other part is through associated natural gas. In the case of mini- PROFIT ($/y) 1.63 × 10 10
−2.16 × 10 12
−2.16 × 1012
mizing TFW and TE, there is no production of petroleum because all TOTAL EMISSIONS 29.843 5.335 5.118
natural gas is satisfied by importation. (MMmetric ton CO2e/y)
In the case of methanol production, 93.2% is satisfied with im- Importation Natural Gas 0 0.293 0.293
Offshore 1.977 0 0
portation and to satisfy the rest, the production in existing plants is Shale 19.389 0 0
used. In the cases of minimizing TFW and TE all the demand of me- Natural Gas associated 0.844 0 0
thanol is met using importation. Natural Gas non-associated 0.564 0 0
Existing Methanol 1.298 0 0
Importation Methanol 5.77 5.042 4.825
5.2. Scenario B
New Methanol 0 0.000 0.000
TOTAL FRESH WATER 36.576 0 0
Once the results of scenario A have been obtained and knowing the (MMm3/y)
limits of the problem to be addressed, scenario B is established. In Shale 2.729 0 0
Scenario B, results are obtained using the economic incentives for Associated 14.464 0 0
Non-associated 19.386 0 0
methanol production, taking into account the uncertainty associated
Natural gas produced (MMcfy) 1,901,853.897 1,901,000 1,901,890
with the costs of selling natural gas, methanol, as well as the un- Importation 0.000 1,901,000 1,901,890
certainty regarding the demands of natural gas and methanol. Ten Offshore 309,142.654 0 0
scenarios are generated that represent different conditions to evaluate Shale 1,252,970.000 0 0
Associated 162,304.173 0 0
and to determine the behavior of the model under the aforementioned
Non-associated 177,437.070 0 0
characteristics. Petroleum produced (Mby) 284,280.000 0 0
However, as shown in Fig. 4, the production of natural gas by Offshore 265,237.908 0 0
conventional forms when changing the scenarios is the same, it should Associated 19,042.554 0 0
also be noted that it is not necessary to import natural gas. The way to Methanol produced (Ton/y) 2,760,010 2,760,000 2,760,000
Existing plants 186,150 0 0
meet the demands of natural gas is through the production of shale gas.
Importation 2,573,860 2,760,000 2,760,000
Regarding the production of methanol (Fig. 5), it can be noted that the New plants 0 0 0
production of new plants as well as existing plants, remain constant,

10
E. Villicaña-García, et al. Applied Thermal Engineering 166 (2020) 114622

Fig. 4. Production of natural gas for Scenario B (Maximizing mean Profit).

Fig. 8. Production of methanol when importation is restricted by 25% for
Scenario B.

Fig. 5. Production of methanol for Scenario B (Maximizing mean Profit).

Fig. 9. Mean profit with different restriction of methanol importation for

Scenario B.

Fig. 6. Behavior of economic incentives by maximizing mean Profit for

Scenario B.

Fig. 10. Production of new facilities of methanol with different restriction of

importation for Scenario B.

Fig. 7. Economic incentives generated when importation is restricted by 25%

for Scenario B.

Fig. 11. Economic incentives used with different restrictions of importation for
Scenario B.

11
E. Villicaña-García, et al.
Fig. 12. Emission of CO2e generated with different restrictions of methanol
importation for Scenario B.
the consumption of fresh water when restricting imports is practically
zero and it can be considered constant.
At the same time, to determine solutions when there are objective
functions that contradict each other (maximizing Profit and minimizing
Total Emissions), it has been decided to use the Pareto curve through
the ε-constraint method [41]. Where the curve represents optimal so-
lutions, the ones above the curve are suboptimal solutions and below
the curve are infeasible solutions. The Pareto curve was obtained as
shown in Fig. 13, it should be noted that the mean cases are considered
with respect to the uncertainty related to the demand and sale costs of
natural gas and methanol for the calculation of the different solutions of
the curve, besides that the importation of methanol is not restricted. In
the case of Point A, total emissions are minimized and constitute the
lowest emissions but the greatest loss of Profit, on the contrary, point J
is determined by maximizing the Profit and represents the best Profit
but the greatest generation of emissions of CO2 to the environment.
Points A and J correspond to extreme solutions. Fig. 14 shows inter-
mediate solutions, where there is observed that the higher the Profit,
the emissions generated to the environment increase. It is also im-
portant to note that since there is no restriction on the importation of
Fig. 13. Pareto curve. NF: Economic incentives in New Facilities; EP: Economic incentives in Existing Plants.
12
Applied Thermal Engineering 166 (2020) 114622
methanol, the installation of new methanol plants (NF) is not promoted,
therefore the economic incentives are negative in all scenarios, on the
other hand, solution J has greater incentive in the existing plant (EP)
and there is a reduction of 2.56% in the F-I scenarios. Solution E re-
presents one of the best solutions because despite the incentives of the
existing plant that are reduced by 150% (from 943.1 to −471.6 $/y)
compared to the maximum Profit (scenario J, 1.837 × 1010 $/y), the
Profit remains at 1.81 × 1010 $/y, in addition to representing the fold
point with respect to the other solutions (B-D) which maintain the
economic incentives constant but the Profit is reduced up to 82.2%.
6. Conclusions
This paper has introduced a mathematical programming model for
the strategic planning for methanol production that involves the use of
regional natural gas resources towards self-sufficiency. The model ac-
counts for the production of methanol using existing and new plants as
well as the associated infrastructures and supply chains. The model also
considers the uncertainties associated with the variabilities in costs,
supply, and demand. Several objectives (profit, emissions, water foot-
print) were reconciled through multi-objective optimization and the use
of Pareto curves.
The work also uses economic incentives and penalties to encourage
national methanol production. Considering an objective production
which must be coherent and achievable, if the production is fulfilled, a
base economic incentive is obtained, if the production is exceeded, the
base incentive is obtained, and an extra incentive is generated. On the
other hand, if production is not achieved, the incentive is punished.
This is very important to consider since in this way the government
promotes production without resorting to importation not only of me-
thanol but of various components that can be obtained by the country's
own resources and are widely used in different industries.
To demonstrate the value of the proposed model, the approach is
applied to a case study in Mexico. In this way, it was showed that it is
possible to satisfy methanol demands without using imports and, in
addition to that, good economic incentives are obtained, improving the
national production of methanol. It was also observed that the greater
E. Villicaña-García, et al.
Fig. 14. Pareto curve of intermediate solutions. NF: Economic incentives in New Facilities; EP: Economic incentives in Existing Plants.
the production of new methanol plants, the incentives generated will be
much better, concluding that the construction of such methanol plants
is feasible.
This model is general and can be applied to several case studies,
making pertinent changes in parameters.
Acknowledgements
The financial support obtained from CONACyT and UMSNH-CIC is
gratefully acknowledged.
Appendix A. Supplementary material
Supplementary data to this article can be found online at https://
doi.org/10.1016/j.applthermaleng.2019.114622.
References
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