Feasibility of Liquefied-to-Compressed Natural Gas Station (L-CNG) in India - A Unique Opportunity to Advance Natural Gas Market Penetration

Globally, the drivers for LNG adoption vary from region to region but are largely centred around environment, safety & reliability and economics with China, Japan and US as classic examples respectively. The Government of India’s (GoI’s) plan to double the share of natural gas in India's energy mix - from 6.5% in 2015 to 15% over the medium term as well as promote clean fuels for transport sector is perfectly aligned with the said global LNG adoption drivers and has resulted positive sentiments about India’s natural gas sector outlook.

India is increasingly becoming a sweet spot for LNG as suppliers and investors are investigating new strategies for penetrating deep into the Indian market and locking investments across gas infrastructure along the value-chain. Government led initiatives such as approval of LNG as a vehicle fuel, BS VI compliance, amendments in gas cylinder norms (to support storage and supply chain of L-CNG stations), PNGRB Round IX bidding with number of CNG stations as a bid parameter for 86 geographical areas, etc. are positive enablers in this direction.

On the LNG availability & supply front there are significant additions in re-gas capacity expected via. Greenfield and brownfield projects along Western, Southern and Eastern coast which may push total regas capacity from existing 27.5 mtpa to 65 mtpa by 2020.

The private sector looks equally enthusiastic, which is evident from positive private sector turnaround for CGD bidding, India’s first LNG FSRU at JSW Jaigarh Port by H-Energy and the most recently inaugurated India’s first L-CNG hub station at Waghodiya (designed & built by Express India Private Ltd., parent company named Cryogas Industry’s Group).

In terms of downstream gas market development, the L-CNG concept offers a unique opportunity for all stakeholders as it bypasses the need for a conventional gas pipeline (a historic challenge for early or rapid expansion and new gas market creation) and can result in rapid development of LNG corridors along India’s Golden Quadrilateral, North-South corridor, East-West corridor and National Highway network. With the proof-of-concept existing globally, players such as Chart Industries, Cryostar, Inox, Vanzetti, etc. already operating either in specific sub-components/modules or as package offerings.

L-CNG offers a risk diversification since dispensing of CNG or LNG is not only limited to four-wheelers and long-haul transport but can also pretty much cover railways, waterways and industrial consumption through hub-and-spoke model in India. Interestingly, the Indian Railway Organization for Alternate Fuels (IROAF) is spearheading diesel substitution technology to push CNG and LNG as locomotive fuel. All the same, the Inland Waterways Authority of India (IWAI) along with Petronet LNG (PLL) are targeting National Waterway - 1 (Ganga) for launching LNG barges by December 2018.