Business

LNG Business

India LNG Scenario

  • Currently India is the 4th largest importer of LNG globally. With GOI thrust on use of greener fuels in transport sector, LNG is going to play a pivotal role in the future for this sector.
  • However, these growth rates are coming at a cost, our cities are rank among the most polluted cities globally suffering from major air pollution with particulate matter (PM), sulphur dioxide, nitrogen oxides, carbon monoxides and ozone levels at a point which exceed the National Ambient Air Quality Standards (NAAQS) by a large margin.
  • As per Niti Aayog Report 2024, transportation accounted for near 40% of PM pollutants to India from Delhi. As per the report Medium Duty trucks & Heavy-Duty trucks emit around 1.6 million tonnes of NOx and 53,000 tonnes of PM emissions along with 34% of CO2 emissions despite trucks accounting for just 3% of the vehicles in the country.
  • The Government of India has implemented several major policies aimed at developing and improving the Country’s infrastructure across various sectors, which will directly enhance energy requirement and thus natural gas consumption in the country. Further, LNG being a Fuel which has virtually unending availability and is strongly vying for a position juxtaposed to renewables.
  • Total LNG traded in World in year 2024 is 412 MMTPA.
  • Import of LNG by India in year 2024 is 27.30 MMTPA which is 7% of total world LNG Trade.
  • India is dependent on imported LNG (45% of NG is imported) to meet its domestic demand. The LNG is imported either through long term (LT) contracts or through spot purchases (ST) from the international markets. Most of the long-term contracts are either Crude linked which are largely from Middle East or Gas linked which are from USA.

Why transport by LNG a requirement for India?

  • Road logistics account for above 70% of India total freight movement, which is carried out by a mix of diesel fuelled medium and heavy commercial vehicles. By the current growth rates of the Commercial Vehicle industry, it is estimated that there would be 17 million trucks on Indian roads by 2050. If India’s trucking sector stays on its current growth trajectory, trucks will be responsible for annual CO2 emissions of 800 million tonnes by 2050, with HDTs accounting for over 50% of the share.
  • on average daily truck running in India is around 250-400 km, compared to 700 km in Europe and the US. Fuel costs account for 40 - 45% of costs for a road logistics company in India. LNG as a higher energy density fuel will help the truck to cover (1200- 1600) km on a single filling of 400 Kg tank helping both the cost economics and the green initiatives required by the customers.
  • LNG sells at an attractive discount to diesel rate immediately helping the economic case for the shift & a near zero % chance of pilferage due to the characteristics of LNG (BP below -162 degree C)
  • In Summary, LNG as trucking fuel will transform the trucking industry from reducing costs of fuel, near zero % scenario of pilferage, a studied reduction in emissions & greater distance coverage from higher mileage thus increasing margins.

Mahanagar LNG Expansion Plans

  • As a part of new business initiatives, MGL and BLNG have formed a JVC (Joint Venture Company – Mahanagar LNG Private Limited (MLPL)”) to set up LNG stations across the country.
  • MLPL plan aligned with GoI initiative to decarbonize the long-haul trucking sector in India & increase Natural Gas as % of the Energy Basket. Presently in India the share of natural gas in energy basket is 6.7%. The Government has set a target to raise the share of natural gas in energy mix to 15% in 2030.
  • Initially in First phase 6 LNG stations are plan in near future in various regions of Maharashtra including Chhatrapati Sambhaji Nagar, JNPT, Bhiwandi, Amravati etc., and one LNG station in Seoni, Madhya Pradesh.
  • The long-term plan is to set up 26 Stations in next 5 years across India in various industrial, logistic hubs and highways.
  • Collaborating with OEM’s, LNG retrofitters, transporters and end users to develop a sustainable solution for LNG Industry.
  • Maha LNG Vision is to transform the Long-Haul Trucking Sector in India with resultant beneficial objectives for all stakeholders.