Small-scale LNG as fuel for India

GS Paper III

News Excerpt:

Recently, the Union Ministry of Petroleum and Natural Gas dedicated to the nation India’s first small-scale liquefied natural gas (SSLNG) unit at GAIL (India) Ltd’s Vijaipur complex in Madhya Pradesh.

What is SSLNG?

  • SSLNG refers to the liquefaction and transportation of natural gas using unconventional means in a significantly smaller-scale operation than the usual large-scale liquefaction, regasification, and transportation infrastructure and processes. 
  • LNG - gas in its liquid or super-chilled form - is supplied in specialised trucks and small vessels to industrial and commercial consumers in regions that are not connected by pipelines.
  • The SSLNG chain can start from a large-scale LNG import terminal from where the LNG can be transported to consumers by cryogenic road tankers or small vessels instead of being regasified and supplied through pipelines.
    • The chain can also start at locations with ample natural gas supply or production, where small liquefaction plants can be set up.

Why small-scale LNG?

  • The government aims to increase the share of natural gas in its primary energy mix to 15% by 2030 from a little more than 6% at present.
  • Natural gas is far less polluting than conventional hydrocarbons like coal and oil.
  • It is also cheaper than oil, more than 85% of India’s requirement for which is met through costly imports. 
  • Natural gas is seen as a key transition fuel in India’s journey towards green energy and future fuels.

Why is the use of LNG in long-haul trucks and buses attractive?

  • As diesel is the dominant fuel in these segments, LNG is significantly cleaner - with reduced carbon dioxide emissions and negligible amounts of particulate matter, nitrogen oxide, and sulphur dioxide emissions.
  • LNG offers a slightly longer range to vehicles than diesel with similar-sized fuel tanks and is usually cheaper than crude oil, from which diesel is derived. 
  • Although India imports around half of its natural gas requirement, this dependency level is much lower than that for crude oil. 
    • Replacing a major chunk of India’s diesel consumption by LNG could lead to substantial foreign exchange savings.
  • LNG has been used successfully and aggressively in medium and heavy commercial vehicles in many countries, most notably in China. 

Challenges:

  • A major challenge in scaling up gas consumption lies in transporting gas to places that are not connected by India’s natural gas pipeline grid.
    • This problem also hinders the direct use of LNG as fuel for long-haul trucks and inter-city buses.
  • Large-scale pipeline projects that are in the works will take years to be completed; even so, last-mile delivery challenges may persist in many parts of the country.
  • The challenges in India include - 
    • Lack of easy availability of LNG-powered vehicles, 
    • The higher initial cost of these vehicles compared with diesel,
    • Absence of an LNG vehicle financing ecosystem,
    • The virtually non-existent LNG retail network.


Related News: ‘LNG as a Transportation Fuel in Medium and Heavy Commercial Vehicle’ Report

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