The unified scheduling of the national pipeline network is of great significance to the oil and gas industry

Liu Bing (National Petroleum Pipeline Network Group Corporation)

Pipeline transportation is not just an important part of
the oil and gas industry.
It can not only play an important role in the implementation of the national energy strategy and industrial layout, serve macro-control, but also realize real-time regulation and control
of resources through unified scheduling.
Unified scheduling is an important step in realizing the optimization of the overall situation and embodies the advanced nature of
socialist production relations.
After the establishment of the national pipe network company, the optimization is not only in the horizontal interconnection and optimization of the pipe network, but also provides the possibility
of optimizing the resource allocation of the vertical whole industry chain.
At the same time, the big data of oil and gas in the pipeline network will help build China's "international oil and gas trade market" to obtain pricing power, thereby fundamentally ensuring national energy security and maintaining social stability
.

1.
Look after the pipe network under the big pattern

The oil and gas storage and transportation system mainly includes important storage and transportation facilities such as oil and gas long-distance pipelines, oil depots, gas storage depots, LNG connection terminals, etc.
, and the construction of backbone pipeline network is the cornerstone
.
In the past ten years, China has successively built and put into operation pipelines such as the West-to-East Gas Transmission and China-Myanmar Oil and Gas Pipeline, and the oil and gas backbone pipeline network has basically formed, with a total mileage of more than 120,000 kilometers, covering 31 provinces, autonomous regions and municipalities in China and the Hong Kong Special Administrative Region
.
A number of LNG connection terminals have been built and put into operation, and more than 20 have been completed, and offshore oil and gas strategic channels have also been formed
.
It basically constitutes an oil and gas supply pattern
of "sending oil from the west to the east, transporting oil from the north to the south, transporting gas from the west to the east, gas from the north to the south, Myanmar gas going north, and landing from the sea".

With the pipeline, Xinjiang's oil from the extraction, processing, refining, transportation to Chengdu, Chongqing, Xiang'e gas station, the whole process does not exceed 3 days; Natural gas from Central Asia is collected, purified and transported from wellheads to Shanghai for no more than a week
.
The supply of raw materials for chemical plants and refineries should be through crude oil pipelines, and refined refined oil should also be transported through pipelines to cities, airports, docks and military oil depots
.
Clean and convenient natural gas is even more to be delivered to thousands of households through the pipeline network, and glass plants and fertilizer plants also need a large amount of pipeline gas supply
.
As a special transportation industry in the tertiary industry, oil and gas pipelines directly or indirectly serve the primary, secondary, and other service industries
.
How to fully understand the role and tasks of pipe networks? And look at the
big picture.
In this way, we can know the status, role and significance of the pipe network in the national economy, and can we more accurately understand the responsibilities and tasks
of the pipe network.
To study the pipeline network, we must first study the energy layout; Planning the pipe network is actually planning the allocation of resources throughout the country
.
At present, China's energy pattern has undergone no small changes
.
In 2018, coal accounted for less than 60% of primary energy consumption for the first time, while oil and gas accounted for more than 25%
for the first time.
At present, China's crude oil consumption has reached 650 million tons / year, and natural gas consumption is about 270 billion cubic meters / year
.
The total annual oil and gas consumption expenditure has reached 5 trillion yuan
.

Macroscopically, the layout of the oil and gas pipeline network can play an important role
in the implementation of the national energy regulation strategy and industrial layout.
Microscopic level, the pipeline network can realize real-time regulation of oil and gas resources through unified scheduling
.
The recent "Nord Stream 2 Pipeline" dispute between the United States and Europe has further illustrated the strategic position of the
pipeline.
It can be said that the oil and gas pipeline network is a well-deserved "energy hub and national heavy weapon"
.

2.
Cost composition of oil and gas industry

Looking at the pipeline network under the overall pattern, first of all, let's look at the cost composition
of the oil and gas industry.
There are three main categories
: energy consumption (fuel power and loss costs), maintenance operations and manufacturing costs, and wages and benefits.
From the analysis of industrial characteristics, maintenance operations and manufacturing costs are mainly related to the status of fixed assets, wages and welfare expenses are affected by human resources, and energy consumption is closely related
to production and operation mode.
Oil and gas development, refining, storage, transportation, sales and other four major production links
.
Energy consumption accounts for nearly 20% of the cash cost of oilfield operation (production), about 30% of the cash cost of refinery operation, more than 50% of the cash cost of oil pipelines, and about
40% of the complete cost.
According to relevant statistics, at present, the proportion of energy consumption costs in the overall cash cost of PetroChina and Sinopec is close to 30%, ranking first among variable costs, and the second place is maintenance operations and manufacturing costs
.
It reflects the characteristics
of two consumption (energy consumption and loss) and one fee (maintenance fee).

3.
Characteristics of oil and gas industry

The production and operation of the oil and gas industry is the most important four links
in the exploration and development (production), oil refining, oil and gas storage and transportation (pipeline transportation), natural gas and refined oil sales.
The oil and gas industry is a high-input, high-yield, high-risk industry, but also a high-tech industry
.
The importance of the production and operation management of the oil and gas industry is reflected in three levels: First, from the perspective of technological progress, it can improve the efficiency of productivity and give full play to the productivity potential of enterprises; Second, from the perspective of economic responsibility, it can improve economic benefits and improve corporate profits; Third, from the perspective of social responsibility, it can promote the intensification of
social resources.

The oil and gas industry has its own inherent objective operating characteristics
.
Process complexity and upstream and downstream continuity determine the diversity of its production processes; The characteristics of high risk and high yield determine that its income is very sensitive
to operational differences.
Therefore, the production characteristics of the oil and gas industry can be summarized as "four balances", that is, the production capacity balance of the six links of production, transportation, supply, marketing, storage and trade is required; Requires oil, gas, electricity and other energy balance; Time balance required on facilities, number of installations operating and maintenance cycles; Requires the material balance
of raw material supply and output.

Under different political systems, the oil and gas industry reflects different social attributes
.
Different social attributes give them different production and operation characteristics
.
Under the capitalist production relations, the oil group shoulders the economic responsibility to investors, and in order to optimize production and operation and improve economic efficiency, the common practice in the international community is mainly threefold: First, to maintain the low cost and high efficiency of various business activities through strengthening strategic management; Second, through capital operation to achieve rapid expansion of the company's scale and further strengthening of strength; The third is to form new profit growth points and improve the return
on investment by expanding emerging markets.
As mentioned above, the overall cash cost of the oil group company accounts for nearly 30% of the energy consumption expense, ranking first among variable costs, and the second place is maintenance operation and manufacturing costs
.
The rationality of production and operation, the optimization degree of joint operation determines the level of energy consumption costs
.
Under the socialist relations of production, the oil and gas industry not only shoulders economic responsibilities, but also shoulders political and social responsibilities
.

4.
Global optimization theory and examples

The production task of the oil and gas industry is to complete the production
, transportation, supply, marketing, storage and trade of oil and gas and its products in a safe, reliable and economical manner.
From the perspective of operations research, it is a single target value or multiple objective value optimization solution
with multiple constraints.
Global optimization can provide greater freedom and optimization space than segmented optimization, and better results
can be obtained in the mode of overall consideration and global optimization.
From the perspective of operations research, the fewer constraints and more degrees of freedom, the more ideal
the optimal solution.
Global optimization can better improve resource efficiency and productivity
.
Here are a few typical examples of "cross-border" joint operations:

Example 1: Optimization
of gas field and pipeline transportation.
When global optimization is not considered, gas collection, treatment, purification and other gas field production processes often consume and waste up to tens of megapascals of wellhead pressure
.
Because according to the management method optimized by segments, the gas field enterprises only need to supply gas according to the minimum gas supply pressure (the minimum intake pressure designed for the downstream long-distance pipeline
).
However, if the operation and management is carried out from the perspective of global optimization, the gas field retains the "residual pressure" to the first station of the long-distance pipeline as much as possible, so that the energy waste from the wellhead to the gas collection station, the treatment field, the purification field, and the long-distance pipeline avoids the meaningless energy waste
of first decompression and then pressurization.
The load on the compressor station is reduced, the pressure energy that needs to be replenished by the entire system is reduced, and the energy consumption is reduced
.

Example 2: Optimization
of oilfield and refinery intermodal transportation.
Without considering global optimization, Union Stations typically use light hydrocarbon recovery and crude stabilization units to extract the light components from crude oil as much as possible and are used locally or sold
at low prices as low-grade, low-value mine fuel.
Such as: associated moisture, liquefied petroleum gas, etc
.
After extraction, the "rich oil" becomes "poor oil" and then transported to the refinery
through the pipeline.
This often results in lower levels of output in downstream refineries and even inefficient operation
of some units.
However, if the operation and management is carried out from the perspective of global optimization, the oilfield retains as many light components as possible for more professional and efficient fine separation and processing under the premise of ensuring production safety and transportation safety, which can make the entire oil and gas production and refining industry chain produce better benefits
.

Carry out the overall optimization of multiple links (fields) across production, transportation, supply, marketing, storage and trade, and its degree of freedom and optimization space are greater, and the effect of cost reduction and efficiency increase is better
.
Since the 1960s, foreign countries have begun to apply global optimization to oil and gas systems to achieve cost reduction and efficiency increase, and domestic research work
in this area was not started until the early 1980s.

5.
The advanced nature of unified scheduling

The establishment of the State Pipeline Network Company to unify the management of the backbone pipeline networks of crude oil, refined oil and natural gas in China is conducive to the macro-control and real-time allocation of energy, and reflects the advanced nature of
socialist production relations.

In the West, due to different systems, private ownership of the means of production has led to excessive reliance on market commercial competition for resource allocation
.
Coupled with the abuse of anti-monopoly mechanisms, it is difficult for pipeline companies to become larger, and their role as energy hubs and overall optimization has been greatly reduced
.
In Europe, several pipeline companies can only coordinate through "commercial mechanisms" and are less
efficient.
It is precisely because of the advanced nature of the socialist system that we have the advantage
of "standing on the overall situation and concentrating our efforts on doing great things.
" The national pipe network company came into being
under the superior social system of our country.
Under the structure of the national pipe network company, we can achieve unified ownership and unified scheduling
of three media pipe networks.
The unified management of a country's oil and gas pipeline network is the first in the world
.

Overall planning and optimization coexist with free competition, give full play to their respective advantages, and achieve the greatest common denominator to benefit the people
to the greatest extent.
The establishment of the national pipeline network company is not only conducive to optimizing the allocation of resources and avoiding repeated waste, but also can contribute
to the opening of the oil and gas market to a variety of ownership entities.
The national pipeline network can provide comprehensive oil and gas supply and demand data and real-time logistics data
for the oil and gas trading platform.
Once the trading platform interacts with the operation of the pipeline network, it will even give birth to a new international oil and gas futures trading market
.
The management mode of unified scheduling of national pipe network companies is undoubtedly advanced in the world! This is also another manifestation
of the advanced nature of the socialist system.

6.
Unified scheduling optimization configuration outlook

After the unified management and unified scheduling of the oil and gas pipeline network, its role in the optimal allocation of resources can be viewed from the following aspects:

First, in terms of
macroeconomic regulation and control and industrial adjustment.
At present, the national backbone oil and gas pipeline network has been initially completed, forming a supply pattern of "west-to-east oil transmission, northern oil transportation to the south, west-to-east gas transmission, north gas southbound, Myanmar gas northward, and sea gas landing", which is an important achievement
of the national oil and gas resource planning for decades.
The comprehensive construction cost of the backbone oil and gas pipeline network is about 100 million yuan (yuan / km), with large investment, long service life and long
investment recovery period.
This network is not easy to come by, and in order to perfect, use, and not waste this network, we must make it better serve the overall situation of the country's industrial restructuring and give play to the role of
macroeconomic regulation and control.
At the same time, the existing layout of the national pipe network is also an important factor
affecting the adjustment of industrial structure.
As mentioned above, the oil and gas pipeline network is closely related
to the development of the primary, secondary and tertiary industries.
The adjustment of the industrial structure must break the original allocation of resources, and the supply and demand relationship of oil and gas resources is also facing the process of
breaking the balance and rebalancing to form a new normal.
After the establishment of the State Pipe Network Company, this network throughout the country will certainly contribute to the big game of industrial restructuring
.

The second is in terms of fairness and openness and adjustment of supply and
demand.
China's existing oil and gas backbone pipeline network has a high degree of automation and a good
information foundation.
After unified management, the use information of facilities and oil and gas logistics information will be collected centrally, and these national big data cannot be underestimated
.
First, this big data can be directly used to support the implementation of "fair and open oil and gas pipeline network facilities"
.
Through big data, oil and gas traders can not only understand which facilities still have surplus storage and transportation capacity, so as to bid for rent, but also understand the relationship between oil and gas supply and demand in various places, so as to find business opportunities and fair competition
.
Second, the use of this big data can more objectively study the law of oil and gas consumption across the country, so as to formulate a more effective supply assurance plan
.
Third, this big data can be used to carry out third-party oil and gas quality supervision to better protect the rights and interests
of consumers.
Fourth, big oil and gas data will help China obtain international oil and gas pricing power
through market mechanisms.
China has become the largest importer of oil and gas, and more than half of China's oil and gas resources need to be imported
by sea in the form of futures or spot through international trade.
Pipeline imports generally lock in prices completely or partially in advance by signing long-term agreements of 10 or even 20 years to shield them from the risk of
price fluctuations.
Imported oil and gas resources by sea are different from pipeline imports, and their prices are generally determined by futures and spot markets, and the price fluctuates greatly
.
It is particularly easy to form malicious hype, and even trigger an economic crisis to endanger energy security
.
Since 2018, China has jumped to become the largest oil and gas importer, but China currently has no oil and gas pricing power
.
To gain pricing power, it is necessary to have a trading market and effectively control the healthy operation of
this market.
After the establishment of the national pipe network company, the whole country has a network, unified scheduling, and data transparency
.
It can not only realize the fair opening of domestic oil and gas facilities and adjust the supply and demand of
oil and gas.
This will also make an important contribution
to China's access to international oil and gas pricing power.
By using this big oil and gas data of the national pipeline network, we can build the Shanghai Oil and Gas Trading Center into the world's fifth international energy trading market and obtain pricing power
for China.
For major energy importers, international free trade in oil and gas resources is the greatest guarantee
for national energy strategic security.

The third is in terms of oil and gas supply and emergency disposal
.
The State Pipeline Network Company is another large central enterprise that can carry out unified management of important infrastructure throughout the country after the State Grid Corporation and the State Railway Corporation
.
An important feature of such central enterprises is that they not only bear economic responsibilities, but also assume social and political responsibilities
.
It is particularly important to assume responsibility for
the security of the national energy strategy.
In terms of emergency disposal, the State Pipeline Network Company, like the State Grid Corporation and the State Railway Company, can better support the work
of the National Development and Reform Commission and the National Coal, Electricity and Oil Transportation and Emergency Rescue and Disaster Relief Command Center.
On the one hand, the big data of the oil and gas pipeline network mentioned above can be used to predict and warn of oil and gas shortages; On the other hand, emergency disposal measures
can be implemented using an efficient management system with unified scheduling.
Especially in the face of natural disasters, oil and gas embargoes and even wartime emergencies, the unified dispatch of oil and gas pipeline networks can more efficiently perform oil and gas supply tasks and quickly complete the allocation
of oil and gas resources.
So as to better cope with natural and man-made disasters, reduce or even avoid the occurrence of gas shortages and oil shortages, ensure energy security, and maintain social stability
.

The fourth is to reduce costs and increase efficiency and stabilize prices
.
After the unified scheduling of the pipeline network, it is conducive to reducing costs through optimized operation, thereby reducing oil and gas prices
.
To reduce costs, on the one hand, it is to directly reduce the operating costs of oil and gas transportation, on the other hand, it is to play the role of the energy hub of the pipeline network, cooperate with the implementation of macro-control policies by the state, and realize the optimization of the resource allocation of the whole industrial chain and even across industries, so as to achieve cost reduction and efficiency increase
.
As mentioned earlier, the cost of energy consumption (also known as; Combustion power costs) account for 30% of the operating costs of the oil and gas industry, the first
variable cost.
In the pipeline transportation link, the energy consumption cost accounts for 50%.

It can be said that controlling the cost of energy consumption is one of
the keys to reducing costs and increasing efficiency in the oil and gas industry and reducing oil and gas prices.
According to estimates, only through the operation optimization of pipeline storage and transportation links, cost reduction and efficiency increase, it can even achieve a price reduction of 0.
2 yuan per liter of gasoline and a price reduction of 0.
1 yuan
per cubic meter of natural gas.
After the unified scheduling of the pipeline network, the operation data is highly centralized and the remote control is highly concentrated, which is conducive to better carrying out the "two tests and one evaluation" work
of the oil and gas pipeline network.
Namely: online monitoring of energy consumption, energy consumption prediction and energy efficiency evaluation
.
"Two tests and one evaluation" can effectively support the "PDCA management cycle"
.
Through this scientific management cycle, it is only a matter of
time before the lowest cost operation is achieved.
If the role of the "energy hub" of the pipeline network is further exerted, the "two tests and one evaluation" model can also be extended to the upstream and downstream links of the oil and gas industry to achieve a greater degree of cost reduction and efficiency, and even to other related industries to achieve a wider optimal allocation of
resources.