LNG tanker trucks could transport 3m t/y to market

Vol 8, PW 25 (23 Mar 05) Midstream & Downstream

GAILs undeclared opposition to IOCs project is easy to understand.

Its estimated that when fully operational in about three or four years time tankers could carry the equivalent of about 3m t/y LNG to customers. This will hurt GAILs plan to emerge as the countrys dominant pipeline gas transporter.

A project source tells this report: Nearly 60% of (regassified LNG) customers are small businesses whose daily requirement is about 40 tonnes and about 95% of potential gas customers in India are not linked to pipelines. Cost-wise, LNG by tanker is comparable to R-LNG by pipeline.

But LNG by road enjoys two clear advantages: The customer will have the freedom to move the receiving point, unlike with a pipeline, and the customer can choose the pressure at which the gas is received. Supporters of LNG by road say their virtual pipeline will supplement and not compete with real pipelines transporting R-LNG.

We are told GAIL feels threatened by the project and was allegedly responsible for the two-year delay in getting the pilot project started. One of the biggest hurdles was in obtaining approval for a tap off point from the Dahej storage tank, we learn.

Under the pilot project design, one customer each from industry, the power and transport sectors will receive LNG by road. Welspuns initial supply of 40 tonnes per day will service the power and industry sectors.

They will take 25 tonnes per day to power their generator sets and 16 tonnes per day for industrial heating. We learn Welspun has already ordered new turbines worth Rs25cr ($6m) and is testing them using light diesel.

IOC-IBP-Chart is talking to public bus transport authorities in Mumbai, Thane, Chennai and Bangalore. But, thanks to covert opposition from GAIL - which sees a threat to its CNG market - this part of the pilot project will take more time to be realised.