Value Engineering for Selection of Gas Sources in Gas Supply Engineering

Liu Jiayou
Department of resources and civil engineering Shandong University of Science and Technology Taian, China E-mail: liu_jiayou@163.com
AbstractApplying an appropriate city gas source is important for reducing the costs of living and production, energy-saving, environmental protection and city long-term planning. According to the principle of value engineering (VE), the paper puts forward a model for selecting city gas source. The model includes identifying research object, function analysis, cost analysis and value analysis. The model mainly focuses on function analysis and a functional evaluation index system of gas source is constituted, the improved analytical hierarchy process (AHP) is used to determine the weights of the indexes for function coefficient calculation. Combining the technical and economic characters of gas sources, value index is formulated as the evaluation parameter to select the optimal scheme. An application case is studied using the model, and the selected gas source long-distance pipeline natural gas (LPNG) is suitable for the city. Keywords-value engineering; gas source; function analysis; value index

II.

MODEL FOR SELECTING CITY GAS SOURCE BASED ON VE

A. Principle of VE VE or value analysis (VA) is a scientific techno-economic comparison method developed by Lawrence D. Miles. The method uses all existing technologies, knowledge, and skills to efficiently identify costs or efforts that do not contribute to the customer's needs and wants [3]. VE focuses on function analysis of the research objects and aims to gain the maximum benefits and the needed functions at the lowest life cycle cost (LCC). The expression for the method is (1).

I.

INTRODUCTION

City gas is one of the most important energy resources for urban residents living and industry production. An appropriate gas source is of significant for reducing the costs of living and production, energy-saving, environmental protection and promoting sustainable development of cities. At present, city gas sources mainly include LPNG, liquefied natural gas (LNG), compressed natural gas (CNG), liquefied petroleum gas (LPG), manufactured gas (MG) (including coal-generated gas, oil-generated gas, etc) [1]. And marsh gas is used as gas source in some small towns. Because of different characteristics of gas sources and diversity of cites location and long-term planning, many factors should be considered when selecting gas source. In gas supply engineering, the common method for selecting gas source is that the characteristics of the gas sources and city gas pipeline planning are qualitatively analyzed, and then the optimal gas source is determined by comparing the annual cost of gas sources projects. The method is more subjective and evaluation index is simplex [2]. The paper presents a model based on VE for selecting optimal city gas source.

V = F /C (1) Where, V is value or value index of the scheme, F is the function or function coefficient of the scheme, C is cost or cost coefficient of the scheme. To gain the maximum benefits, F should be greater and C should be smaller. A greatest value of V shows the functions of the research object are achieved at the lowest LCC and the object should be the optimal one.
B. Model for Selection of Gas Sourcse in Gas Supply Engineering The program of VE includes identifying research object, function analysis, cost analysis and value analysis. 1) Determining research object To select the optimal city gas source using VE method, various gas sources should be identified as the research objects [3]. 2) Function analysis City gas source takes the role of supplying gas for various users safely and reliably, the characteristics of gas sources must meet the requirements of different users and the requirements of city long-term planning, the design and construction of gas source engineering must follow the relevant norms and regulations and strive to reduce the project cost. According to the suggestion of experts and gas engineering requirements, the functional evaluation index system of gas source is constructed and shown in Fig.1.

978-1-4244-4813-5/10/$25.00 2010 IEEE

The importance of the evaluation indexes in Fig.1 is different, it is necessary to determine the weights of the indexes for calculation of function or function coefficient. In the paper, the weights are determined using improved AHP. Assuming m experts evaluate the importance of n indexes on the same layer. According to the principle of AHP, a judgment matrix is established, then an eigenvalue weight matrix B can be gained using the concept of the optimal delivery matrix of antisymmetric matrix [4], [5], [6].

B = ( B) mn
n

b11 b = 21 # bm1
kj

b12 " b1n b22 " b2 n # # # bm 2 " bmn

(2)

0 bkj 1 ,
Where,

b
j =1

= 1 , (k = 1,2," , m; j = 1,2," , n )

bkj is the weight of the j index evaluated by the

Figure 1. Functional evaluation index system of gas source.

k expert.

Objectively, there is an optimal relative weight matrix = (w1 , w2 ," wn ) and it can be obtained using concept

of generalized distance and the minimum variance.

D = B W

= (bkj w j )
k =1 j =1

k =

dk

d
k =1

(6)
k

Seeking derivative of the variable w j , letting

m m D = 2 w j 2 bkj = 0 w j k =1 k =1

So the comprehensive weights matrix can be expressed as (7).

V of the indexes
(7)

V = B = (v1 , v 2 ," , v j ," v n )

wj =

b
k =1

= (1 , 2 ," , m )

kj

Where,

v j is the comprehensive weight of the j index.

( j = 1,2," , n )
1/ 2

(3)

n 2 (bkj w j ) j =1 ck = m n 2 (bkj w j ) k =1 j =1
Where,

Five experts are invited to evaluate the indexes in Fig.1 using the improved AHP. The weights of the indexes are calculated and shown in TABLE I and TABLE II. According to functional evaluation index system of gas source, the indexes are graded using 10-points system, and a high score shows the degree satisfying the basic function is higher. Assuming there are p schemes and q function indexes, the cumulative scores of the indexes and function coefficients can be calculated using (8) and (9) respectively.

(4)

c k is the proportion of weight error evaluated by

the k expert to the total weight errors. According to the principle that the smaller is the error, the larger is the entropy, the following transformation is carried out. d k = 1 / ck (5)
Index Weight TABLE II. B Index Weight C1 0.2784 C2 0.2666 B1 C3 0.2750 C4 0.1122

S i = v j S ij
j =1

(i = 1,2," , p )

(8)

TABLE I. B1 0.6056

INDEX WEIGHT OF B LAYER B2 0.1972 B3 0.1972

INDEX WEIGHT OF C LAYER C5 0.0679 C6 0.4437 B2 C7 0.1850 B3 C8 0.1629 C9 0.5296 C10 0.0739 C11 0.2024 C12 0.1942

Fi =

Si

S
i =1

(i = 1,2," , p )
i

(9)

scores and function coefficients of the schemes are calculated and shown in TABLE III. The investments and operating costs of gas sources, the annual costs and cost coefficients calculated by (10) and (11) respectively for the schemes are shown in TABLE IV [8], [9], [10], [11]. Using the calculated function coefficients and cost coefficients, the value indexes of the schemes can be determined by (1) and the results are shown in TABLE V. Obviously, the value index of LPNG is the largest, so LPNG is the optimal gas source according to the principle of VE. As for the city is not far away from the long-distance natural gas pipeline, the investment and operating cost of LPNG are not very high. Natural gas is a high quality energy resource with higher colorific value and better security. Using the gas is conducive to environmental protection and the gas is widely used in many fields and is supported to develop by the government generally. So selecting LPNG as the city gas source is reasonable. The project investments of LNG and CNG are higher, but they are good stand-by gas sources for cities with particularly large gas consumption. For the city in the case, LNG and CNG are good stand-by gas sources because the developed transportation is convenient for gas transportation. If the city is far away from the long-distance natural gas pipeline which will lead to higher construction cost of pipeline, LNG and CNG are suitable to be main gas source of the city. LPG has higher colorific value, but its price is more expensive than natural gas, and its combustion is usually instable. In many cities, LPG-air mixture is used as stand-by gas source. The bottled LPG is used by the users without pipeline gas supply for its convenience of usage. For some remote towns, LPG is also a good main gas source.
TABLE III. SCORES AND FUNCTION COEFFICIENTS OF GAS SOURCES Evaluation index (C) C1 C2 C3 C4 C5 Score of B1 C6 C7 C8 Score of B2 C9 C10 C11 C12 Score of B3 Total score Function coefficient LPNG 9 10 10 9 9 9.5425 9 10 10 9.5563 9 9 9 9 9 9.4384 0.2674 LNG 9 9 10 8 9 9.1637 9 8 10 8.8137 8 7 8 8 7.9269 8.8508 0.2508 CNG 9 8 10 10 8 9.0536 9 8 10 8.8137 8 8 8 8 8 8.7988 0.2493 LPG 10 7 8 9 7 8.3353 8 8 8 8 8 8 8 8 8 8.2032 0.2324

Where,

S i is the cumulative score of the i scheme; v j is j function; S ij is the score of the j function Fi is the function coefficient of the i

the weight of the of the i scheme; scheme.

3) Cost analysis The LLC of gas source engineering includes project investment and operating costs (mainly including the costs of depreciation, maintenance, repair and wages, etc.). To compare the costs of schemes, the annual cost method is used to calculate the annual cost [7]. The calculation expression is (10).

AC = P

r (1 + r ) + OC (1 + r )t 1
t

(10)

Where AC is annual cost, P is present value of cost, r is annual interest rate, taking 8%, OC is annual operating cost, t is computing time, taking 25 years. The cost coefficients of schemes can be calculated using (11).

Ci =

AC i

AC
i =1

(i = 1,2," , p )
i

(11)

Where,

C i is the cost coefficient of the i scheme, AC i is

the annual cost of the i scheme. 4) Value analysis According to expression (1), the value indexes of the schemes can be determined. The scheme with the highest value index achieves the required function at the lowest LLC, so it is the optimal scheme. III.

Evaluation index (B)

B1

APPLICATION CASE
B2

A small city locates in the east of China. The gas supply load of the city is about 675000MJ/d. Currently, LPG is the main gas source. Lacking of coal and oil resources, MG cant be produced in the city, so MG cant be determined as the main gas source. The city is about 20km away from the longdistance natural gas pipeline, and the transportation around the city is well-developed. According to gas resource distribution around the city and city planning requirements, LPNG, LNG, CNG and LPG are advised to be the city gas source. Considering the characteristics of the gas sources and the city long-term planning, the evaluation indexes of gas source are scored using 10-points system, according to the calculated weights of the indexes and equation (8) and (9), the cumulative

B3

Total scores and function coefficients TABLE IV.

COST ANALYSIS OF GAS SOURCES LPNG 900 85 LNG 1125 135 CNG 1500 195 LPG 825 100

Item Project investment, 104yuan Operating cost, 104yuan

Annual cost, 104yuan Cost coefficient TABLE V. Item Function coefficient Cost coefficient Value index

169 0.1835

240 0.2606

336 0.3637

177 0.1922

VALUE INDEXES OF GAS SOURCES LPNG 0.2674 0.1835 1.4572 LNG 0.2508 0.2606 0.9624 CNG 0.2493 0.3637 0.6855 LPG 0.2324 0.1922 1.2092

IV.

CONCLUSION

According to principle of value engineering, a model for selection of city gas sources is constructed. The model mainly focuses on the function analysis of city gas source and a function evaluation indexes system for gas sources is established, an improved AHP are used to determine the weights of the indexes. Value indexes of gas sources are used as the evaluation parameter for selection of gas sources. Application case is analyzed using the model and the selected gas source LPNG meets the city requirements. Value engineering is feasible to select the city gas source and the evaluation result is reasonable and intuitive. REFERENCES

Duan Changgui, Gas Transmission and Distribution, Beijing: China Architecture & Building Press, 2002. [2] Deng Yuan, Handbook of Gas Planning and Design, Beijing: China Architecture & Building Press, 1992. [3] MILES L D., Techniques of Value analysis and Engineering. New York: McGraw-Hill,1972. [4] Yang Hong and Wan Zhonglun, Determination of the function weight in value engineering, Journal of Xihua University (Natural Science), Vol.24, pp.77-79, March 2005. [5] Jia-you LIU, Selection of gas pipeline system schemes based on value engineering, Proceeding of the 2nd International Conference on Value Engineering and Value Management (ICVE&M2009), Publishing House of Electronics Industry, pp. 227-232, October 2009. [6] Ma Rongguo and LiuYanni, Weight value determination method of highway construction comprehensive evaluation, Journal of Traffic and Transportation Engineering, vol. 5, pp.110-112, June 2005. [7] Liu Jiashun, Li Guoming, Technology Economy, Beijing: Mechanic Industry Press, 2004. [8] Sun Jihong, Gas source selection for middle and small cities, Engineering Construction and Archives, vol.19, pp.417-419, May 2005. [9] Yang Jianwei and Zhao Liang, Selection of city pipeline reserve gas source, Urban Gas, vol. 372, pp.25-26, February 2006. [10] Xu Shu, Economic and technical analysis of gas source selection in Xinglin region, Energy and Environment, pp.27-30, March 2004. [11] FU Xiguo, Selection of gas sources in middle and small towns, GAS & HEAT, vol. 25, pp.7-48, July 2005.

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