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October 11, 2018

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LNG rises as fuel of choice

LAHORE: The Liquefied Natural Gas (LNG) has emerged as the most efficient, clean, and competitive fuel for running trucks, railway engines, and other goods transport, especially if compared with the diesel.

As it costs less than half the price of diesel, which is currently the only fuel for goods transportation in the country, the LNG can drastically reduce the cost of goods transportation by substituting diesel in trains and heavy and light trucks category.

Industry experts said that forward–looking present government should utilise the opportunity and get the first mover advantage by converting the country’s transportation system from diesel to LNG gradually.

It is high time to introduce the LNG in the transport sector, keeping in view the vast opportunities being unfolded under the China-Pakistan Economic Corridor (CPEC).

As part of One Belt, One Road (OBOR), the CPEC is going to become a major logistic hub of the whole region. Huge quantities of goods will be transited through Pakistan, right from Khunjrab Pass to Gwadar and other parts of the country. Fueling such a massive traffic will be a gigantic task and the LNG as a transport fuel can help efficiently address this challenge.

Moreover, rising fuel costs and increasing awareness about emission reduction, the LNG as an alternative fuel addresses both these concerns. Hence, it is now establishing itself as a competitive solution both as the low carbon fuel and almost more than 47 percent cheaper for heavy goods transport. Owing to various factors, rising fuel prices are directly impacting the profitability of the transport industry. So, cheaper fuel is considered to be the best bet these days.

According to latest data, the LNG is currently the cheapest source of imported energy. Against the LNG’s price of $10.467/mmBTU, diesel’s is as high as $22.09 /mmBTU, motor gasoline $22.23/mmBTU, liquefied petroleum gas (LPG) $19.1/mmBTU, while furnace oil’s price stands at $16.39 /mmBTU.

As per a study, a full tank of the LNG is sufficient for 800 to 1,200 kilometer long heavy truck ride and averages at about 3 kilometer/liter of fuel consumption. Since LNG occupies only a fraction (1/600) of the volume of natural gas in its gaseous state, and takes up less space, enough fuel can be stored in the tank to enhance the travel/transportation time significantly.

The latest trends show that liquefied natural gas or LNG is increasingly becoming the most suitable fuel for ships, trains, and long-haul trucks.

It is made by chilling natural gas to -259F to turn it into a liquid that is a dense source of energy, maintained at low temperatures in cryogenic fuel tanks.

The LNG is most suited for 18-wheelers, which are constantly on the move and can keep tanks cool with a running engine. Pakistan with its weak train system and spread of population across the country depends heavily on trucking hence RLNG can be a cost-competitive fuel choice.

Experts term the LNG as the future source of energy and since the government is making all-out efforts to reap the benefits of low-cost LNG in the country to overcome prevailing energy crisis, promoting its usage in transportation would radically decrease the import of expensive fuels such as diesel.

The use of the LNG can do wonders for the ailing Railways. Pakistan, which is suffering from its weak rail services, mainly due to high cost of fuel and limited resources can put the railway operations back on the track of profitability. The revival of railways will also improve its commercial and asset value.

Sheikh Rashid Ahmed, the federal minister for railways, has recently said that Pakistan Railways had been lying in limbo for the last 15 years, but Pakistan Tehreek-e-Insaf (PTI) government had decided to put it on the front-burner.

The country is planning to improve the fuel mix to reduce cost of fuel by minimising share of oil through the LNG import on fast-track. As another initiative and given the fact that local gas reserves are depleting fast, the government should also work on converting all the compressed natural gas (CNG) stations to RLNG as country is facing immense gas shortfall. Pakistan-Iran gas project is in doldrums due to the international sanctions on Iran. Similarly, Turkmenistan, Afghanistan, Pakistan and India (TAPI) gas project will also take 3 to 4 years to mature.

Globally, oil supplies two-thirds of all transportation fuels, yet that share is on the decline as natural gas conversions have gained speed. In the last few years, the pace of fleet conversions to natural gas grew so fast that it started damping diesel demand.

The LNG-fueled vehicles are gaining popularity in the region as well. China is not only going ahead with manufacturing the LNG-powered vehicles, but the government has also prioritised it as a means of transportation for exporting goods to Europe via land routes.

India’s ministry of road, transport, and highways has also given the green-light for the use of the LNG as a fuel for road vehicles. In India, now the LNG has been approved as fuel for vehicles with fueling stations expected to be made available across the country soon.

India is also planning to set up the LNG stations along the inland waterways that will provide fuel for LNG-fueled barges.

It is believed that natural gas could form a bigger part of the transport energy mix in Pakistan too, alongside developments in areas such as greater vehicle efficiency, cost cutting and making environment clean.

In developed and developing countries new environmental regulations require shipping operators to reduce local emissions. LNG fuel, which is virtually free of sulphur and particulates, will help them meet these requirements.

According to a report there are more than 15.2 million natural gas vehicles worldwide and by 2019, this number is seen rising to 25 million.

It is never too late to take some future-proofing decisions to right the choices that are now being proven wrong with the changing times.

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