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LNG in transportation

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LNG Industry,


A new report from Cedigaz, the International Center for Natural Gas Information, suggests that LNG as a fuel is set to capture “significant market share” in the transport sector by 2035.

LNG in road transport

The report entitled ‘LNG in Transportation’ claims that road transport holds the greatest potential, with annual demand expected to reach 96 million tpa in Cedigaz’s base scenario (45 million tpa in 2025).

In a recent press release to promote the report, Cedigaz said: “Use of LNG in land transport will be largely limited to heavy duty vehicles (HDV) and will essentially be driven by the difference between the price of diesel and that of LNG”.

The cost advantage of LNG over diesel is likely to be the main driver for the adoption of LNG as a fuel in land transportation, rather than environmental legislation. Cedigaz also expects China to represent almost half of this market, as it has the world’s largest inland goods transport market and has already developed an extensive LNG supply infrastructure, with over 100 000 LNG vehicles and 1100 refuelling stations at the end of last year.

LNG in the marine sector

Cedigaz also expects the use of LNG as a fuel to grow in the marine sector, and forecasts that demand will climb to 77 million tpa in 2035 (35.7 million tpa in 2025). However, Cedigaz warns that the rate and pace of growth will be dependent on the timing and geographical scope of emissions restrictions set out in the MARPOL treaty. Although LNG can be seen as a very attractive solution when taking into consideration all of the relevant factors (such as Capex, Opex, operational constraints, loss of cargo space, etc), the breakeven time will depend on a number of parameters including the age of the vessel, the cost differential between LNG and traditional fuels, and the time spent in Emission Control Areas (ECAs).

LNG in the rail sector

Finally, the report acknowledges that there is also potential for the use of LNG as a fuel in the rail sector, although this is likely to be limited to countries with high levels of long haul freight and low levels of penetration of electric powered traction in the freight sector, conditions found in relatively few countries. In the company’s base case, LNG demand in the rail sector is projected at 6.2 million tpa in 2035 (0.9 million tpa in 2025). Cedigaz believes that the US, China and India have the highest potential for growth in this area.

Cedigaz acknowledges that the development of LNG as a transport fuel faces a number of challenges, and will have to go hand in hand with the development of fuelling infrastructure.


Adapted from press release by

Read the article online at: https://www.lngindustry.com/small-scale-lng/29092014/lng-in-transportation-1490/


 

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