Petronet bets big on LNG as fuel to meet transportation needs

V. Sajeev Kumar Kochi | Updated on January 16, 2018 Published on September 15, 2016

Prabhat Singh, Managing Director & CEO, PLL (file photo)

Will help reduce transportation costs, dependence on crude oil, says MD

Petronet LNG Ltd is betting big on the usage of LNG as a fuelling option to meet India’s transportation requirements, Prabhat Singh, Managing Director & CEO, PLL, said.

“We are awaiting a green signal from the government following a proposal to the Ministry of Road, Transport and Highways to use LNG as a fuel in vehicles along with other existing fuels,” he said.

Cheaper fuel

LNG, which is cheaper than compressed natural gas (CNG), is not an approved fuel for vehicles right now. However, its widespread usage will reduce the cost of road transportation as well as the country’s dependence on crude oil requirements, he told Business Line in a one-to-one interaction.

India consumes about 195 million tonnes of crude-based oil products today and the figure is likely to go up to 230 million tonnes by 2022, resulting in more dependence on crude and additional foreign exchange spending. Given the low processing cost to convert LNG as fuel compared to other fuelling options, he said the differential savings in terms of energy equivalence would be $12 dollar per barrel compared to crude.

“When we are graduating for a better fuel for the future, there will be savings in our foreign exchange kitty and increase in fuel quantity,” he said.

To create awareness on the usage of natural gas for road transportation, he said PLL has approached Tata Motors to procure 100 trucks with LNG fuelling options to operate in the country.

“We are exploring options to deploy some of these trucks initially in Kochi-Mangaluru stretch on a pilot basis by outsourcing it to fleet owners,” he said. The new government in Kerala is very positive on this move and has assured to hand over the required land at 3-4 locations to set up LNG filling stations and storage units.

The Kerala Government is in the process introducing 1,000 buses to run on CNG fuel. “We have mooted a proposal to convert at least 100 buses to LNG fuel for inter-city movement,” Singh added.

Need to improve infra

Considering the low capacity utilisation of natural gas in the country, Singh emphasised the need to improve the infrastructure like pipeline connectivity and re-gasification plants. Citing the case of lower capacity utilisation of Kochi LNG terminal costing the company an annual loss of approximately ₹350 crore, he said free flow of gas will ensure an uninterrupted fuel supply.

Answering a question on the progress of the much delayed pipeline connectivity from Kochi terminal, Singh said that IL&FS has bagged the contract for the spread I of 90 km in the Kochi-Koottanad-Bengaluru-Mangaluru project, which is expected to be completed in 24 months.

Petronet has signed an MoU with the Inland Waterways Authority of India to set up LNG filling stations in three locations along the NW-1 for fuelling barges. Discussions are also on to covert diesel barges into natural gas and efforts are on for preparing a feasibility report to enable LNG bunkering for coastal shipping movements in the Indian peninsula.

Published on September 15, 2016
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