Any entity now being allowed to open an LNG Station in any GA is a recent policy call to recognize, encourage, dialogue/ debate and initiate commercial activity to establish LNG as a Transportation fuel.

For promotion of LNG as transport fuel, all stakeholders (transport fleet operators, regulators, suppliers, vehicle manufacturers, OEMs, CGD operators and financial institutions) need to be activated.

Just as a perspective, China despite exercising centralized State control push have taken a decade to have an impressive half a million vehicles on the road.

Few private players are now planning to develop "LNG Corridors" for the supply of LNG as fuel to diesel fired long-distance heavy vehicles/ freight carriages and passenger buses.

If this situation has to leapfrog to let`s say a target to consume 5-7 MT of LNG, then we are talking of at least ensuring that all 2,50,000 new trucks getting added every year are LNG fuelled. If we add the 80,000-85,000 new buses that are added every year, we will need another 2 MT. So, 9 MT of new LNG business can be taken as the first phase target which roughly translates to the capacity of an average LNG Terminal.

Who is this opportunity for and whether they would see this as an opportunity?

• Companies with existing retail outlet on main trunk routes/ highways can experiment with setting up LNG infrastructure and then help create the demand and ecosystem for LNG.
• Existing CGD players setting up CNG stations can convert the ones on the highways to LNG as well and can use the LNG storage facility as a `virtual pipeline` for their network.
• LNG Importers can see this as a forward integration of entering Petro-retail by having their own dealers and distributor network.
• OEMs to Vehicle manufacturers will face import vs domestic R&D, design challenges and much stiffer safety norms compliance. They would require seeing a future demand volumes which makes setting up dedicated production lines viable.

However on the demand side i.e. fleet operators of trucks and buses, the long term savings on fuel cost and increase in range is currently not commensurate with the upfront capital investment required (new vehicles or conversions) and restriction of their vehicles to few set routes as per availability of fuel. This segment would need hardcore incentives for them to make a viable case to raise funds for making a significant shift.

The notification of LNG as automotive fuel via an amendment to the Central Motor Vehicles Rules (1989) in 2017, was the first giant step forward to revolutionise the use of LNG in the transport sector in India.
On a per-kilometre basis, taking into account engine efficiency and other factors, there is a minimum savings of 20% for LNG-fuelled transportation vehicles. The benefit can go up to 30%.

The advantage is, way lesser retail outlets for LNG are required, as the mileage is far better. One fill of LNG can take a loaded LNG truck to around 900 km, while a diesel truck needs a station every 400-500 km.

Today, we have around 70,000 petroleum retail outlets and been already planning to double that. Even if we have 1,000 LNG filling stations, they can cater to around 1.5 lakh trucks across the country.

EVs for local and LNG & CNG for long distance and heavy vehicles is the best environmental scenario for India which requires a heavy and consistent push of policy measures, continuous technology innovation and tangible incentives.

For more interaction and opportunities contact you@sanjaykaul.com

Sanjay Kaul, FEI

Founder Univ of Petroleum Energy UPES, Univ of Tech & Mgmt, ISPe, IESD, Sanmarg, BGCL, PwC O&G, Deloitte Energy Resources