An Optimal Bilateral Contract Transaction Model for Natural Gas Suppliers and Large Consumers Based on Mixed Game Theory

In a gradual liberalization environment of natural gas market, the competitions in bilateral contract transacting include not only the competitions between the contracting parties, and generation companies and large consumers, but also the competitions in contracted natural gas prices between multiple suppliers to obtain more gas supply. In this context, a mixed game model is constructed for bilateral contract transactions between natural gas multiple suppliers and large consumers. The objective of the game is to determine the optimal contract price by playing a non-cooperative Bertrand game and Stackelberg game with other suppliers in order to maximize the profitability of the gas sold through bilateral contracts, while the large consumers choose their gas purchase strategy based on the price offered by each supplier, the forecast of the spot LNG price, and the gas demand at each time period in order to minimize their gas purchase cost. Moreover, the existence proof and solution of the Nash equilibrium for the game model are presented. Through scenario design and simulation, the results show that the mixed game bilateral optimal trading model proposed in this study effectively coordinates the bilateral trading between gas suppliers and large users in the natural gas sales market, and both suppliers and large users can benefit from participating in the bilateral contract.