IOC scores a â€کfirst' in India by delivering LNG by tanker

Vol 11, PW 8 (23 Aug 07) Midstream & Downstream

Indian Oil this month added another significant business to its portfolio: selling LNG by road tanker to customers.

Not only is this mode of selling LNG a first for IOC, the country’s largest refiner, it is also the first time LNG is being sold this way in India. IOC calls it the â€کVirtual Pipeline Project’.

So far it has only two customers, one each in Gujarat and Maharashtra, but others will surely follow as the idea, common in other parts of the world, catches on in India. IOC’s interest in LNG delivery by tanker stems from meetings five years ago with Ohio-based US company Chart Industries, experts in cryogenic storage and distribution.

But, says an industry source, it took IOC two years to translate the initial interest into an agreement with Chart to set up a pilot project tapping LNG from tanks at the Dahej terminal operated by Petronet-LNG in Gujarat. On signing an agreement in 2004, work began to convince Petronet-LNG that the project is a winner.

But it was only last year that IOC identified a tap-off point on the pipe that carries LNG from onshore storage tank â€کNumber One’ to the regassification unit. Further delay ensued over identifying a tap-off point from the Petronet-LNG tanks at Dahej.

“Petronet-LNG did not see this as a priority,â€‌ we hear. “It was busy figuring out how to double capacity at Dahej.

â€‌ After the pipe had been tapped and all systems were in place, the first cargo of LNG was loaded into a road tanker on August 10th for transport to Baroda-based Indo-German joint venture Schott Glass – a manufacturer of glass ampoules for the pharmaceutical industry. On August 11th, Schott received its first cargo of 32,000 litres of LNG, which was unloaded into a 100,000-litre capacity tank on the factory premises before being re-gassified for use as R-LNG.

Schott is testing its own systems to use the R-LNG. “This takes about 10 days or so and involves checking the various valves, tightening and loosening them as needed to accommodate the contraction that happens when (very cold) LNG passes through a piping system.

â€‌ Schott is expecting its second tanker any day.