India starts on LNG retail transport fuel outlets

Indian state-controlled companies have laid the foundation stone to set up 50 LNG fuelling stations along the country's highways, which is a first step towards eventually setting up 1,000 such outlets within three years, oil minister Dharmendra Pradhan said today.

LNG as a fuel for the heavy vehicles sector will account for 20-25mn m³/d of new gas demand by 2035. This will contribute towards the government's plans to increase the share of natural gas to 15pc in India's energy mix from the current 6.3pc.

LNG supplies totalling 5mn t/yr will be required to cater to an expected 1mn vehicles using LNG as a fuel in a few years, said an official from state-controlled importer Petronet LNG. Talks are under way with vehicle manufacturers and kit makers to retrofit vehicles or build new trucks and buses with LNG fuelling facilities.

Regasified LNG is 40pc cheaper than diesel and causes less pollution, Pradhan said. The government plans to set up LNG stations every 200-300km on major highways. Within three years India will have 1,000 LNG stations on all major roads, industrial hubs and mining areas, he said. Trials of LNG fuelling in India started in 2015.

The 50 LNG fuelling stations will be set up and commissioned by state-controlled companies including refiners IOC, Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL) and gas suppliers Gail and Petronet LNG. IOC will set up 20 outlets, BPCL and HPCL 11 each and the rest done by the gas companies.

LNG fuelling stations will complement existing and planned city gas networks. India has awarded 136 geographical areas in the ninth and tenth bidding rounds with 1.2 trillion rupees ($16bn) likely to be invested in these projects over eight years, according to ratings agency CRISIL. Around 10-15pc of the investment will go towards compressed natural gas retail outlets and over 50pc towards connecting households in rural and semi-urban areas to the city gas networks.

India's LNG imports in September rose to 2.97bn m³ (2.3mn t) of equivalent pipeline gas, flat against August and up from 2.8bn m³ a year earlier. India's dependence on LNG imports to meet demand total gas demand was 57pc in September.

By S Dinakar