Industrial clusters located off the gas grid in parts of Gujarat, Western Madhya Pradesh and Northern Maharashtra are increasingly turning to clean fuel, thanks to the truck transport of the Liquified Natural Gas (LNG). Indian arm of the Shell Plc—Shell Energy India—has started rolling out small-scale LNG supplies through its truck-loading facility from Hazira LNG terminal in South Gujarat. This, according to officials, has helped industries in the off-grid locations to adopt cleaner energy fuels and reduce emissions.

Providing access

Launched in January 2021, the truck-loading facility is not new to India but was first for Shell’s Hazira facility which is surrounded by industrial clusters along the coast of Gujarat and also in the hinterland of Western Madhya Pradesh and parts of Maharashtra. There are quite a few in the 300 kms area. This include Ankleshwar-Bharuch chemicals, fertilisers and pharmaceutical cluster; textiles and engineering cluster near Surat and heavy engineering and equipment cluster at Vadodara.

Currently, Shell despatches the trucks with LNG in cryogenic tankers to the remote areas within the radius of 300-500 kilometres from the Hazira facility, which is equipped with 5-million tonnes per annum LNG import terminal. The LNG terminal is connected to all the three major national gas pipelines effectively pushing gas to almost everywhere in the country.

Speaking to businessline, Rahul Singh, VP India, Integrated Gas & RES, underlined a growing adoption by small players. He also highlighted that the smaller industrial customers that were off the grid were disconnected from access to LNG. They were not able to have access to LNG for their decarbonisation needs.

Shell Energy has two operational truck-loading bays at Hazira. The trucks carry small loads in the size of about 20 tonnes capacity, effectively carrying about 800 metric million British thermal unit of LNG to meet their small requirements. The pipeline connectivity no longer becomes a constraint for them, he said.

Potential pitfalls

The customers would require regasification facilities to convert LNG back to natural gas. However, the industry sees some concerns too such as dependability of supplies and the price factor.

A Surat-based policy expert and former President of Southern Gujarat Chamber of Commerce and Industry, Ajoy Bhattacharya said that access to clean energy for small businesses is immensely necessary.

However, there may be issues in truck transport of LNG like ensuring consistent and timely supply and control on pricing. Gas supplies through the grid are under certain controls, whereas truck-loaded LNG supplies may have variable factors such as distance and travel time, which could impact pricing, he said.

Notably, through the small-scale LNG, Shell Energy attempts to contribute in realising India’s target of increasing the share of gas in primary energy mix to 15 per cent by allowing small players to access clean fuel.

While gas customers in industrial clusters are expected to be the primary beneficiaries, small-scale LNG will also support the market seeding and development of the recently licensed CGD (City Gas Distribution) geographical areas, not yet connected by pipelines, the company had said while inaugurating the LNG truck-loading facility.

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