LNG as a cheaper and cleaner fuel for Heavy Commercial Vehicles in India

India is the 3rd largest energy consumer in the world after China and USA. According to the Ministry of Petroleum and Natural Gas, the primary energy consumption in the country was about 809.2 Million Tonnes of Oil Equivalent in 2018. India plans to increase the share of natural gas from present level of 6.2% to 15% in its primary energy mix by 2030. To achieve that, efforts are underway to increase the domestic production of gas and enhance LNG (Liquified Natural Gas) import capacity. Currently India has 6 operational LNG terminals and 4 more are under construction. The government also has a strong focus on the completion of the national gas grid and roll out of CGD (City Gas Distribution) Pan India.

“A CGD network is the interconnected network of pipelines to make supply of natural gas to domestic, industrial or commercial premises and CNG stations situated in a specified geographical area.” – Annual Report 2018-19 | Ministry of Petroleum and Natural Gas

India has 1,906 CNG Stations and 35.17 lakh CNG vehicles, as per official data from Dec 2019. Domestic use of natural gas refers to Piped Natural Gas (PNG) as cooking fuel. Approx. 55 lakh households and more than 35,000 Industries and Commercial Units are currently connected with gas supply.

LNG for India’s transport sector

For transport sector, LNG is pegged as a clean and economical fuel for Heavy Commercial Vehicles. According to Petronet LNG (PLL), a leading energy company that set up the country’s first LNG receiving and regasification terminal in Gujarat, “Apart from being an environmentally superior fuel, LNG also reduces fuel bill of the fleet operators about 25% and import bill of the country by 30%-40% as compared to crude oil based fuel”.

Comparison with CNG – As explained by a moneycontrol report, CNG takes three times more space than LNG at a certain temperature, restricting CNG to mostly intra-city use. Since large volumes of LNG can be stored using the same capacity tank, it gives a much better drive range suitable for long haul.

The LNG system operates at lower pressure and evaporates quickly – reducing the chances of fire hazard and offering safe transport. According to Tata Motors, the fuel carrying capacity of the LNG buses is up to 2.5 times more than CNG ones, and can operate up to 600-700 kilometres in one tank fill. LNG buses are lighter in weight, and offer enhanced levels of payload. Tata Motors delivered India’s first LNG bus order of 4 LNG powered buses to PLL in March 2020. PLL estimates that more than 1 lakh trucks would run on LNG in next 4-5 years and plans to put 300 retail outlets for LNG by 2024.

Prabhat Singh, MD & CEO, PLL told Financial Express in an interview that “One fill of LNG can take a loaded LNG truck to around 900 km, while a diesel truck needs a fuel refilling station after every 400-500 km. Even if we have 1,000 LNG filling stations, they can cater to around 1.5 lakh trucks across the country.”

Alongside new LNG compatible vehicles from OEMs, diesel trucks can also be retrofitted to run on LNG. To adopt LNG for transport application, Govt of India modified Central Motor Vehicles Rules 1989 in the year 2017 to include LNG as transport fuel. An amendment to the Petroleum and Natural Gas Regulatory Board (PNGRB) Regulations, 2008 has included LNG fuel stations under the definition of natural gas stations.

We find out more from industry expert Abhay Gupta – Head of LNG and Mining at Advantek Fuel Systems Pvt Ltd, Ghaziabad.

What all vehicle segments and industries are suitable for using LNG?

Presently, long haul trucks segment is identified for LNG. LNG powered vehicles can offer a travel range upwards of 500 kms on a full tank. PLL is using commercially registered LNG buses for employee transport and claims to get a travel range of 900 km in a single filling. 

Similarly, many core sector industries like mining, power, cement etc. have high material handling operations which consume huge amount of fuel. With LNG, there is a massive scope of savings in fuel cost in addition to lower environmental impact. Many industries particularly chemical, glass, fertiliser etc. are using LNG fuel effectively.

LNG pricing is expected to be in range of Rs 45-50 per kg. One major factor in LNG pricing is the distance from the Port.

CNG and LNG – both are natural gases providing approx. 30% cleaner alternative to conventional fuel. What are the pros of LNG over CNG in terms of ease of storage and transport?

CNG transportation mandates pipeline which is time consuming & costlier to build, whereas LNG (being in liquid form) can be transported in well insulated vehicles.

Places not connected with natural gas pipelines will be served through LNG mode and CNG will be made available to those places through Re-gasification.

What challenges do you see in propagating LNG for transport in India?

Biggest challenge with LNG is the current unavailability of dispensing stations on prime routes & highways.

In order to kick start the usage of LNG in road transport application, LNG stations are expected to be built initially at strategic locations of Delhi – Mumbai corridor by the end of this FY. The golden quadrilateral will be covered in 2-3 years time. CGD companies are expected to open LNG stations in their respective geographical area (GA).

Who can open an LNG station?

LNG stations for dispensing to road transport application can be opened by any entity anywhere (even if it is not the authorised entity for that GA) subject to meeting required safety norms, as clarified by PNGRB earlier this year. No special license is required.

India is taking a multi-pronged approach towards reducing vehicular pollution and curbing its fuel import bill. While BEVs seems to be the focus for light/medium commercial B2B mobility applications and buses, Hydrogen and LNG are being explored to shift heavy duty commercial transport and inter-city passenger buses away from diesel. Watch this space for more developments.

Useful links and References:

1. Ministry of Petroleum and Natural Gas – Annual report 2019-20
2. Ministry of Petroleum and Natural Gas – Annual report 2018-19
3. ET report
4. UTI article on CNG, LPG, LNG
5. LNG as a Transport Fuel in India