Small scale LNG was one of the big talking points at this year’s LNG 17 Conference in Houston, Texas. In addition to hosting its own conference session, the topic of LNG as a transportation fuel was also creating quite a stir in the exhibition hall. The ‘LNG for transport’ exhibit pavilion was bursting to the brim for each of the 20+ presentations that took place over the three day seminar programme, and the exhibition floor was full of companies showcasing their latest technology to meet this rapidly developing sector of the industry.
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Previously, I have written comments alluding to LNG fuel as the industry’s ‘next big thing’, and recent developments would appear to support this line of thought. In the last few months, several major proponents of this market have started to aggressively pursue infrastructure development.
In April, Royal Dutch Shell finalised an agreement with TravelCenters of America (TA) to develop a network of LNG fuelling stations across the US for heavy-duty road transport customers. The proposed plans will see the construction of at least two LNG fuelling lanes and a storage facility at up to 100 existing TA and Petro stopping centres. Shell had previously announced that it is to invest in two small scale LNG production units that will form the basis of two LNG transport corridors in the Great Lakes and Gulf Coast regions. In addition to this, the company is also developing LNG stations at Flying J truck stops in Alberta, Canada, and it will charter the world’s first inland barges that run solely on LNG, set to sail on the Rhine later this year.
China’s ENN Group has also put in place plans to establish a network of natural gas fuelling stations for trucks across the US. The group has partnered with Utah-based CH4 Energy to form Transfuels LLC, which operates as Blu LNG. It is reported that the company will build around 50 natural gas filling stations this year, roughly equal to the number of stations that Clean Energy Fuels Corp. is expected to open.
On the tracks, BNSF Railway recently announced that it is to begin testing a number of locomotives using LNG later this year, with its Chief Executive, Matthew Rose, describing the use of LNG as a fuel as a “potential transformational change for [the] industry”.
The two main drivers for this recent flurry of activity are cost and the environment. The abundance of natural gas in North America has driven prices to ten-year lows, and LNG has the potential to significantly reduce greenhouse gas emissions. This latter point is particularly important for the marine industry, with ship owners in Europe and North America under pressure to comply with strict emission regulations due to come into force in 2015. The European Commission has also put aside €2.1 billion to equip 139 seaports and inland ports with LNG bunker stations by 2025, as part of the EU’s new clean fuels strategy.
There are, of course, some daunting hurdles to overcome before this market can really take-off, not least the cost of building the required infrastructure. However, it seems that the potential benefits are encouraging companies to push forward with their strategies ahead of the market, as they attempt to knock down these hurdles.
This issue of LNG Industry takes a closer look at the topic of LNG as a transportation fuel, with particular focus on the marine industry. You can also keep up to date with the latest developments in this burgeoning market via our website: www.lngindustry.com