1 Multi-Period Planning, Design and Strategic Models for Long-Term, Quality-Sensitive Shale Gas Development Markus G. Drouven & Ignacio E. Grossmann Department of Chemical Engineering Carnegie Mellon University Pittsburgh, PA, 15213, USA In this work we address the long-term, quality-sensitive shale gas development problem. This problem involves planning, design and strategic decisions such as where, when and how many shale gas wells to drill, where to lay out gathering pipelines, as well as which delivery agreements to arrange. Our objective is to use computational models to identify the most profitable shale gas development strategies. For this purpose we propose a large-scale, nonconvex, mixed-integer nonlinear programming (MINLP) model. We rely on generalized disjunctive programming (GDP) to systematically derive the building blocks of this model. Based on a tailor-designed solution strategy we identify near-global solutions to the resulting large-scale problems. Finally, we apply the proposed modeling framework to two case studies based on real data to quantify the value of optimization models for shale gas development. Our results suggest that the proposed models can increase upstream operators’ profitability by several millions of dollars. Introduction It is expected that by 2040 shale gas will eventually account for at least 50% of total natural gas production in the United States 1 . This is a remarkable development considering the fact that as of 2005 the United States were producing hardly any natural gas from shale formations. However, given the projected production increase virtually all stages of the existing natural gas supply chain will need new, expanded, and/or upgraded infrastructure: gas gathering pipelines, processing facilities, transmission pipelines, storage facilities and many more 2 . The objective of this work is to develop high-level, computational decision-making support tools that allow upstream operators to identify optimal shale gas development strategies. Shale gas extraction involves a combination of vertical drilling, horizontal drilling and hydraulic fracturing. Hydraulic fracturing refers to the injection of a fracturing fluid into a geologically tight formation under high pressure of up to 70 MPa. This well stimulation creates fractures in the sub-surface ________________________________ Correspondence concerning this article should be addressed to I. E. Grossmann at grossmann@cmu.edu