In refineries, fuel gas, which is continuously produced during the production process, is one of the most important energy sources. In this paper, a brief introduction of fuel gas system is given. The main problems concerned by the fuel gas system scheduler, such as the compressor operation strategy and the fuel assignment decision, are presented. A logical modeling method, which is called generalized disjunctive programming (GDP), is introduced to model the operation of compressors and the flow of branching structure pipeline network in the fuel gas system. The main purpose of this method is to make the modeling process more easily and systematically. In order to effectively deal with the flow rate proportion of loop structure pipeline network in the fuel gas system, an iterative procedure based on pipeline network simulation is proposed. Thus, the solution of a complex MINLP formulation is replaced by the sequential MILP problem, The efficiency of this method, which requires very low computational requirements, is illustrated with a case study, (C) 2009 The Institution of Chemical Engineers. Published by Elsevier B.V All rights reserved.