Delivering LNG by road will be a booming business

Vol 11, PW 15 (15 Nov 07) Midstream & Downstream

IOC expects its fledgling LNG-by-road business to boom, following the success of an ongoing pilot project with two customers.

Since August IOC has been transporting LNG by road tankers to Schott Glass in Vadodra (Gujarat) and H&R Johnson (Maharashtra). LNG is tapped from an onshore storage tank at the Dahej LNG terminal.

Each customer gets 15 tonnes LNG/day. So far, more than 1300 tonnes of LNG have been delivered.

We learn that IOC and Petronet-LNG have just completed studies to significantly increase utilisation of the present installed capacity to run this emerging business. Increased capacity utilisation is expected to come on stream next month onwards but IOC sources are unwilling to reveal the quantities of LNG that will be on offer through this route.

“We can only say that within three years we foresee the turnover to rise from the present Rs20cr ($4.5m) per year to about Rs1000cr ($230m),â€‌ says an IOC source. “Turnover will depend on the quantity of LNG that we can spare from Dahej for this business.

â€‌ Both Schott Glass and H&R Johnson want more LNG and are unhappy with the small quantities supplied at present. “Each of them has put in a demand for at least 50 tonnes of LNG per day,â€‌ we are told.

For both of them, LNG is superior to the LPG they now use because it helps them manufacture a better class of product. Schott Glass produces glass containers for the pharmaceutical industry; H&R Johnson manufactures ceramic tiles and bathroom fittings.

“The LPG molecule has three or four carbon atoms in it,â€‌ says an industry source. “Natural gas has only one carbon atom.

â€‌ Using LPG in the production process gives a dark tint to the glass or ceramics instead of the clear glass or milky white preferred by customers. “With natural gas they can get clear glass and milky white ceramics products.

Glass and ceramics producers obviously prefer natural gas to LPG.â€‌