Original Research

Evaluating liquefied natural gas export quantities from Egypt using system dynamics approach

Ahmed Ezzat, Khaled S. Abdallah, Yasmin Adel
South African Journal of Economic and Management Sciences | Vol 26, No 1 | a4766 | DOI: https://doi.org/10.4102/sajems.v26i1.4766 | © 2023 Ahmed Ezzat, Khaled S. Abdallah, Yasmin Adel | This work is licensed under CC Attribution 4.0
Submitted: 23 July 2022 | Published: 09 March 2023

About the author(s)

Ahmed Ezzat, Department of Logistics of International Trade, College of International Transport and Logistics, Arab Academy for Science, Technology and Maritime Transport, Cairo, Egypt
Khaled S. Abdallah, Department of Supply Chain Management, College of International Transport and Logistics, Arab Academy for Science, Technology, and Maritime Transport, Cairo, Egypt
Yasmin Adel, Department of Mechanical Engineering, Université Française d’Égypte, Cairo, Egypt

Abstract

Background: Egypt and nearby countries have been discovering new sources of natural gas (NG) leading to proven increased reserves. Egypt has two liquefaction stations for exporting Liquefied Natural Gas (LNG), while nearby countries do not have such stations.

Aim: Egypt adopted a policy to export LNG to major importing countries in Europe. Hence, this article aims to analyse the dynamics of the factors affecting the LNG export supply chain, and the main elements of adequate policies needed to optimise decisions related to LNG export in Egypt.

Settings: The input data for this study were obtained from official national and international reports.

Method: A system dynamics simulation model is used as a decision support system model to optimise decisions related to LNG exports in Egypt.

Results: The model gives insight into the effect of investment in new discoveries, investment in renewable energy and changes in population, gross domestic product (GDP) and LNG export prices, as well as the quantity of LNG re-export on the dynamics of LNG export Present Value and quantity.

Conclusion: The research provides a novel decision support system that can be used in adopting adequate policies along the LNG industry supply chain targets, optimising decisions related to exports of LNG. For Egypt, investments in new discoveries and making a long-term agreement to buy NG to be re-exported, are recommended strategic decisions to consider when targeting the optimisation of decisions related to the export of LNG. Investment in the generation of renewable energy and decreasing the home usage patterns come next in importance.


Keywords

system dynamics; LNG supply chain; LNG Simulation; LNG in Egypt, LNG exports; Zohr field

JEL Codes

C61: Optimization Techniques • Programming Models • Dynamic Analysis; C63: Computational Techniques • Simulation Modeling

Sustainable Development Goal

Goal 7: Affordable and clean energy

Metrics

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