Gas as a vehicle fuel in India [NGW Magazine]

The air quality begins to become especially poor around this time of year, especially in the built-up areas of Delhi and the neighbouring states of Haryana, Uttar Pradesh and Rajasthan (collectively known as ‘Delhi NCR’).

This has now almost become an annual phenomenon. Various governments, both at the state and federal level, have tried to tackle the issue, but their efforts have been piecemeal at best. However, with the realisation that the problem is now severe, authorities have begun to seriously address the problem. And promoting gas in transportation is now high on the agenda.

The Natural gas vehicle programme is not new to India. In fact, one area where there has been some sort of success, especially in case of Delhi NCR, has been compressed natural gas (CNG) as fuel for commercial vehicles. In case of Delhi NCR, the entire fleet of auto rickshaws and buses now runs on CNG thanks to a Supreme Court order more than a decade ago.

However, the natural gas vehicle programme has not been very successful beyond Delhi NCR, Mumbai and the western state of Gujarat because of a lack of infrastructure. As the authorities take further measures to combat air pollution and government helps in building gas infrastructure, more commercial vehicles like trucks are likely to switch to CNG. In addition to Delhi NCR, other cities in north India too have embarked on natural gas vehicle programme.

Truck manufacturers sense an opportunity

With demand potential looking robust, almost all top truck makers in India have now started manufacturing CNG-fuelled trucks. The fourth biggest truck-maker in the country, Eicher Trucks and Buses, part of Volvo Eicher Commercial Vehicles (VECV), a joint venture between India’s Eicher Motors and Sweden’s Volvo, has aggressive plans to expand in the CNG truck segment.

In June this year, the company launched two new variants for its Eicher Pro 1000 series in its CNG portfolio to further strengthen its green energy portfolio: the Eicher Pro 1049, which is one of its most successful products in the sub 5-metric ton range; and the Eicher Pro 1059 in the 5-mt light commercial vehicle (LCV) category.

“These new additions are aimed to capture the last mile delivery segment of customers in the green corridor of the Delhi NCR. Further, the development is also in line with the ‘Clean Fuel Corridor’ being created by the government across the northern belt,” said Shyam Maller, executive vice president, light and medium-duty trucks and buses, VECV.

The two CNG trucks have been introduced in Delhi as well as in the neighbouring states of Haryana and Uttar Pradesh. They will soon be available across India in various sizes, from 10-ft to 14-ft long cargo holds. The Eicher Pro 1049 comes with the longest cargo body (10 ft) and highest payload (2.5 mt) in the sub 5-mt segment, with benefits of both of a pickup vehicle and a truck.

Pro 1049 also has fuel tank capacity of 170 litres which translates into longer trip distances; and low wait times at CNG stations owing to the dual fuel filling valve, an industry first according to VECV, that is compatible with all CNG stations. Moreover, the Eicher Pro 1059 CNG version with 12-ft and 14-ft cargo body lengths has been introduced to address city applications such as transporting voluminous industrial cargo, parcels, beverages and auto components.

Eicher offers the maximum variants in CNG from 5-mt to 10.7-mt range. With the expansion of CNG infrastructure there is an increasing acceptability of higher payload vehicles that can traverse longer distances. Eicher, according to Maller, is working with the customers to bring out suitable trucks that can carry more load, provide best in class fuel efficiency and can cater to segments like e-commerce, parcel and courier, fruits and vegetable.

Infrastructure still lags behind

Although the present Narendra Modi government has made serious efforts towards building out gas infrastructure gas, there remains a lot to do, especially outside of the established markets like Delhi NCR, Mumbai and Gujarat. 

“Infrastructure is a challenge, and a favourable policy is required for promotion of natural gas vehicles to increase customer acceptance and provide cost competitiveness. To encourage customer acceptance, support must be given in purchase of CNG and LNG vehicles,” said Maller.

However, there have been some encouraging developments that have taken place recently. The latest city gas distribution (CGD) licensing round which concluded in August received strong response from the industry.

During the ninth round, 86 areas covering 174 districts in 22 states and union territories were open for bidding. Almost half of India’s population will be under CGD coverage once network rolls out in these areas, according to India’s oil minister Dharmendra Pradhan. This round is likely to attract investments of rupees 700bn ($10bn). Pradhan has also said that India is expected to have around 10,000 CNG stations in the next ten years, seven times as many as today’s 1,400.

In addition to lack of city gas infrastructure, absence of a cross country pipeline grid, especially in densely populated eastern Indian states, is another reason why natural gas vehicle programme has not spread to wider areas. However, there has been some positive developments on the pipeline side as well. Work on the 2,655-km Jagdishpur-Haldia & Bokaro-Dhamra Natural Gas Pipeline (JHBDPL) project – also known as the Pradhan Mantri Urja Ganga project – is progressing according to the timetable.

The project was inaugurated by Indian prime minister Narendra Modi in July 2015. The pipeline will supply gas to under-served eastern states of Uttar Pradesh, Bihar, Jharkhand, West Bengal and Odisha. State-owned Gail is executing the project. The first phase of the project is expected to be complete by end-2018. The Indian government expects the pipeline to give a necessary boost to the city gas network in east India.

“In specifics, we see action on the ground with ONGC, Gail and IGL expanding their CNG foot print all over north India. The presence of advanced technologies and more investments to manufacture kits and CNG tanks is to make it a more feasible fuel system for personal and mass transportation,” said Maller.

Not only the government but companies like Eicher Trucks and Buses are also working with gas suppliers. “We work very closely and collaboratively with ONGC, GAIL and IGL in developing the right sized CNG trucks besides conducting joint campaigns to promote the benefits of CNG. It is a symbiotic relationship between VECV and the gas companies – in the sense that, as the footprint of stations widen geographically, we as VECV will have to develop trucks with higher payload and range. In a similar manner, we are keenly studying how the infrastructure is being laid out for LNG so that we can leverage this opportunity as well,” said Maller.

In July this year, Pradhan said that the government is actively considering classifying LNG as a transportation fuel. India’s biggest LNG importer Petronet is looking to set up a number of LNG station on major national highways.

“CV [commercial vehicle] makers are trying out different technologies to ensure that their CVs are not only safe, but also efficient and green. A part of this endeavour is the development of technologies with LNG as fuel. LNG tanks could provide a CV with a range of 800 km. The current challenge would be the LNG tanks in terms of their technology and cost. It would be a challenge that could be tackled with volumes and acceptance. We at VECV have already developed an LNG truck and are testing it extensively. We will be ready to commercialise this when the infrastructure is in place,” Maller said.

Strengthening the import infrastructure 

If things work out as the government and companies like VECV envision, it will provide a big boost to gas demand in the years ahead. And that would mean more LNG import terminals. With domestic gas production stagnant, India has been relying heavily on imported LNG. There is a belief that LNG import infrastructure will not be sufficient to deal with the rise in LNG imports that is expected to happen in years ahead. 

However, on the positive side both the government and industry have recognised this problem and are working to strengthen the LNG import infrastructure. Numerous new terminals, both state- backed and private, are expected to come online on the west and the east seaboards. In September, Indian prime minister Narendra Modi inaugurated GSPC LNG’s 5mn mt/yr Mundra LNG terminal, in the western Indian state of Gujarat. This is India’s fifth import terminal. A floating terminal, also on the west coast and operated by H-Energy, is expected to come online early next year. Similarly, several projects are planned for the east coast. 

The Indian government, in a paper released in 2016, sounded confident that India’s regasification capacity will increase in next five years from the present 32mn mt/yr to 50mn mt/yr.