NGV Transportation Magazine by All Events Group

NGV Transportation

VOL. 19 | JUL - SEP 2014

NGV

TRANSPORTATION MAGAZINE

FEATURE:

NGVs DRIVING THE GREEN REVOLUTION IN MINING

EVENT & EXHIBITION:

CHINA SEES STRONG NGV GROWTH IN COMMERCIAL VEHICLES SPECIAL REPORTS:

MRU

CHANGING CHANGING THE THE FACE FACE OF OF NGV NGV REFUELLING REFUELLING

EDITOR’S TWO CENTS

Greetings all! As we inch past the half year mark, LNG markets worldwide are buzzing with activity. New deals have been struck for long term deals of LNG supply. Indonesia is set to start receiving more LNG from the US and South Africa looks to Mozambique for solutions to its impending energy crisis. Many new gas related construction projects such as the building of new LNG vessels and expansion of receiving terminals are set for completion by 2015 and are effectively setting the stage for future growth and development. Not all has been completely rosy though. There has been some doubt recently as to Qatar’s future dominance as a global supplier of gas as well as some slight concerns as to Australia’s high labour costs and whether the availability of cheaper gas will have a profound effect on their market. Not to mention that American gas giant, Apache Corp has recently pulled out from LNG Kitimat and LNG Wheatstone projects, causing further apprehension when looking at the gas markets in these regions. The global movement towards a grandiose gas future has already taken shape and is being adopted as the fuel to power various fuel intensive industries – be it mining, plantation or logistics. These sectors are seeing a general shift in attitude towards favouring the use of natural gas. This shift has gained much support through education of the benefits of cost savings associated with the use of gas as the preferred fuel option. This education goes hand in hand with government reforms and the globalized movement to reduce GHG emissions. In this issue we hope to enlighten you on several areas where you can save on your business with regards to your fuel use and what can be done to maximise your usage potential. We’ve also spoken to Jerome Ferrier, IGU President on his thoughts on the global outlook of gas and what we can hope to expect at WGC Paris 2015. We strive to continue to service your needs and provide an excellent resource for you to keep tabs on global events, understand technical issues and learn from relevant case studies that will help you improve, enhance and develop your business, taking it exactly where you want it to be.

Published by:

NATURAL GAS GLOBAL

Managing Director Vincent Choy vincent@naturalgaslobal.com Chief Editor Rizal Rahman

rizal.rahman@naturalgasglobal.com

Editor Ryan Pasupathy

ryan@naturalgasglobal.com

Business Development Samuel Tan Business Development Manager

samuel.tan@naturalgasglobal.com

Stefani Budiman Business Development Manager

stefani.budiman@naturalgasglobal.com

Marketing Manager Denise Lim

denise@naturalgasglobal.com

Graphic Designer Puspo Aurum puspo@olifen.co.id

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Ryan Pasupathy Editor 1

Vol. 19 Jul - Sep 2014 NGV Transportation

CONTENT

NEWS AROUND THE WORLD

01 02 18 38

Editor’s Two Cents

Content

Flow Meters for Natural Gas: Optimization for Fuel Savings An Analysis of National Policies And Its Impact On NGV Growth in Singapore

FEATURE:

NGVS DRIVING THE GREEN REVOLUTION IN MINING

Heavy Duty Savings - HDV Conversion

SPECIAL REPORTS:

MRU (Mobile Refuelling Unit) - Changing the Face of NGV RefuellingFace of

Biogas in Reducing Plantation Fuel Cost

EVENT & EXHIBITION:

INTERVIEW WITH JEROME FERRIER – IGU PRESIDENT

NGV Transportation Vol. 19 Jul - Sep 2014

33 2

30 40

4th Annual LNG Transport, Handling And Storage China Sees Strong NGV Growth in Commercial Vehicles

NEWS AROUND THE WORLD

SINGAPORE July 2014: Singapore Set to get LNG Cargo from Indonesia for Third Tank for import into Singapore.” SLNG’s Jurong Island Facility has 3 tanks that can accommodate 6 mmtpa. A fourth is set to be added by 2017, effectively increasing capacity to 9 million tonnes. There have been rumours that the company has plans to make the third tank open to traders to carry out short term transactions According to Tony Regan, an energy consultant at Tri-Zen International Inc., “The market in the second quarter this year is weak with low prices and there’s expectation that prices will be much stronger when the gas is recorded 2 to 3 months down the road.” Tony Regan went on to say that, “The owner of this shipment could be able to sell it off for up to $16 per mmbtu for winter delivery compared current spot LNG prices of below $11 per mmbtu.”

Singapore LNG Corp., which operates Singapore’s LNG receiving terminal is set to get a LNG cargo for its third tank from the ship Wilpride. SLNG’s spokesperson, Simon Ang said in a statement that, “We can confirm that the Singapore LNG Terminal will be receiving a cargo of LNG that is not intended

- Bloomberg

SINGAPORE

UZBEKISTAN

July 2014: Keppel embarks on $735m ship conversion with Golar Hilli

JUNE 2014: New Uzbek-Italian JV Avtosanoat – Landi Renzo Founded

Keppel is going to perform the world’s first conversion of a Moss LNG carrier into a Floating Liquefaction Vessel (FLNGV) that is expected to be completed in 2017. Keppel has said that the design and engineering activities will begin shortly and the Hilli will be sent to Keppel Shipyard within the year to initiate renewal of key marine systems on board the vessel. According to DouglasWestwood World FLNG Market Forecast, “The global FLNG industry is expected to attract more than US$65 billion of investments through to 2020 which has been driven up by rising costs of onshore LNG terminals”.

A joint venture focusing on production of engine compartment equipment to transfer automobiles to make use of natural gas was formed in Uzbekistan. The joint venture was created by Uzbekistan company, Uzavtosanoat and Italian company Landi Renzo S.p.A. The enterprise will be situated in the territory of free industrial and economic zone, Navoi. The enterprise will produce 25,000 units of engine compartment equipment to convert automobiles to use natural gas. The founders are said to be directing their investments of US$1.8 million into the first phase. Within the project it is planned to localize production and gradually increase the share of local raw material in production while at the same time creating new jobs.

- Singapore Business Review

- UzDaily

Vol. 19 Jul - Sep 2014 NGV Transportation

NEWS AROUND THE WORLD

INDONESIA

Perusahaan Listrik Negara (PT PLN) has ordered the world’s first CNG carrier from China. The ship has been designed by China’s CIMC Ocean Engineering Design & Research Institute. The vessel will fly the Indonesian

flag. The vessel is meant to ply trades from East Java to Lombok communities which cannot receive gas via pipeline. The Lombok CNG plant and CNG vessel are planned to be operational by 2016. American Bereau of Shipping (ABS) Chairman and CEO, Christopher J. Wiernicki, has said that, “This prestigious contract is a testament to our commitment to high quality service, technical innovation and remaining a pioneer in the safe

July 2014: Pertamina to Import More LNG from US

August 2014: BP’s $12b Tangguh LNG Project in W. Papua Get Approval for Environmental Analysis

Pertamina has announced that they have secured a deal to import LNG. Cheniere energy is going to supply Pertamina with a further 760,000 metric tonnes which will bring their total annual import of LNG to 1.52 mmtpa. The 20 year contract will kick off with its first delivery in 2019 and will be charged at price reference to Henry Hub prices. This is the second signed agreement that Pertamina has with Cheniere. Its first being another 20 year contract with its first delivery scheduled for 2018. Pertamina has 15-25 year forward contracts to export much of the LNG produced at Tangguh to Korea, Japan and China. The decision to do this has been somewhat criticized by the press. Because of this, Salis S Aprilian, Pertamina’s senior vice president for gas and power, said that Indonesia may have to import as much as 3 million metric tons of LNG annually by 2025 in order to cope with domestic demand.

BP’s US$12 billion project at Tangguh LNG block in West Papua has been given the green light to be pushed forward as Indonesia’s environment ministry has approved the company’s environmental analysis assessment. The assessment is known as; Amdal. It is a requirement for Tangguh’s shareholders to press forward with the expansion to increase the plant’s capacity to 11.4 mmtpa from 7.6 mmtpa. The approval was granted by the environment ministry on the 24th of July. Christina Verchere, BP regional president for Asia Pacific said that, “This is a significant milestone for the Tangguh Expansion Project, and I would like to give my highest appreciation to the Ministry of Environment, along with the West Papua, Teluk Bintuni and Fakfak Administrations for their efforts and cooperation in reaching this achievement. We look forward to receiving the remaining approvals from the Government to realize the project, which will bring significant benefit to Indonesia.” This facility is the 3rd largest facility in Indonesia. Current operations involve the use of two identical LNG trains. The expansion project plans to add another LNG train to their repertoire. BP and its partners will supply 40% of the LNG output from this new train which would have a capacity of 1.5 mmtpa, to Indonesia’s state electricity company Perusahaan Listrik Negara for the Indonesian market. PLN said that they are working closely with SKK Migas, the Ministry of Energy and Mineral Resources and other government agencies to attain these approvals.

- The Jakarta Globe

July 2014: Indonesia’s PT PLN Order the World’s First CNG Carrier in China

NGV Transportation Vol. 19 Jul - Sep 2014

transport and handling of gas.” He also went on to add that, “As society’s demands continue to drive the search for cleaner forms of energy, new methods of marine transport, propulsion and processing for gas are being required.” CNG carrier designs have been around for more than 10 years. This however, is the first time that an actual order has been received. - Seatrade Global

NEWS AROUND THE WORLD

CHINA July 2014: China Signs US$1.6b engineering from Siberian LNG Project A subsidiary of CNOOC; Offshore Oil Engineering Co, has signed a US$1.6b deal to build equipment for an LNG project in Siberia. Their agreement is that CNOOC’s Offshore Oil Engineering Co will build ‘core modules’ for the liquefaction process on the project in Yamal in the Russian Artic according to a statement on CNOOC’s website. Novatek is currently developing the Yamal Project with France’s Total and China National Petroleum Corporation (CNPC). The first production which will have a capacity of 5.5 mmt will be launched sometime in 2017. - Reuters

Aug 2014: China to Multiply LNG Fleet

China will seek to build 50 new LNG tankers by 2020 as part of its ambitions to secure and energy supply chain to boost its ailing shipbuilding sector. Currently locally built tankers constructed by Hudong-Zhonghua accounted for half of the country’s LNG imports last year with the rest coming from chartered ships.

SOUTH AFRICA July 2014: South Africa Looks to Mozambique, Other for Gas As South Africa battles it’s prevailing issue of energy shortage, it looks over to Mozambique and it’s shale gas resources as it plans to allow higher level of gas into its coal heavy energy mix. The country is currently facing the threat of an imminent energy crisis as its demand has begun to outweigh its supply. 77% of its electricity is generated via coal with only 3% being generated from natural gas sources. The country will face a rising demand that will always accompany economic growth. There will also be a need to replace old coal power stations as their coal reserves are quickly running dry. Tina Joemat-Pettersson, South Africa’s

energy minister, has said that, “With regard to the development of our gas resources, including the regional gas opportunities in neighbouring countries and our own shale gas resources, a draft of the gas utilisation master plan is being finalised, and will be taken through Cabinet before starting with stakeholder consultations.” The biggest issue that the country faces at this moment is the lack of infrastructure. The country does not have sufficient gas pipeline networks or storage terminals. Tina Joemat-Pettersson also mentioned that, “The gas infrastructure development effort is accordingly premised on regional

China is currently under heavy pressure to switch from coal to cleaner energy alternatives. Their plans are to at least double its total gas supply by 2020 and is looking to triple its LNG imports to around 60 mmtpa. - Business Spectator

integration with Mozambique in the east, the importation of LNG and the networking of various load centers for transporting and storing shale gas in the Karoo.” She went on to say that, “The prospect for gas to replace imported crude oil in the transport sector is very high on the government agenda because it bodes well for our macroeconomic outlook, particularly in our balance of payments. In the future, gas is likely to be the most common energy carrier for public transport, freight and domestic heating and cooking.” She added that, “The department of energy had “no intention of abandoning” coal, but that it was “determined to find cleaner technologies that will reduce the adverse environmental impact associated with greenhouse gas emissions from coal generation.” - Business Day

Vol. 19 Jul - Sep 2014 NGV Transportation

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NEWS AROUND THE WORLD

MYANMAR June 2014: Taxi Drivers Threaten Lawsuit over CNG in Myanmar

A group of taxi drivers have threatened to sue the Ministry of Energy in Myanmar unless they are given the authorization to install CNG in their cars. The 73 drivers from Yangon and Bago bought import permits for owners of Hi-lux buses that were handed for substitution. They

have since imported the cars for more than a year since applying to install CNG engines but are yet to be given the signal to go ahead. The ministry has said that this decision is due to them wanting to allocate CNG fuel to buses instead of taxis. The unhappiness was

demonstrated by a protest outside the Ministry of Energy’s office on the 10th of June. There has been some flexibility shown by the government as they have granted 57 owners the permission to have their taxis fitted with CNG kits. There are still another 73 owners who are awaiting approval though and the ministry has advised them to import a bus and reapply instead. Ko Kyaw Hlaing Soe, one of the disgruntled taxi drivers has said that he has been facing substantial losses because of this policy change and has already been waiting for a whole year. He has also said that he and the other 72 owners will continue to keep pressuring the ministry till they have approval. - Burmanet News

PAKISTAN

QATAR

July 2014: China to Invest in US$3b in Pakistani LNG Project

July 2014: Qatar’s LNG Dominance Threatened by Shell’s Reported Withdrawal

An LNG terminal in Gwadar and a pipeline to Nawabshah are being launched by the Pakistani Government with Chinese collaboration which is set to be a US$3 billion dollar project. Pakistani Energy Misnistry (MoPNR) has made the decision to build the LNG terminal and pipeline as part of an inter-government arrangement. China has promised to provide US$35 billion relating to the economic corridor and energy projects. A couple of Chinese companies have already shown interest in the building of the Gwadar terminal and the pipeline. The LNG terminal at Gwadar Port will have a capacity of 19.5 million cubic metres per day.

Shell’s withdrawal from a gas project in Qatar has threatened the country’s dominance in the production of LNG. In 2010, Shell had signed with PetroChina and Qatar Petroleum to drill 2 wells as part of a 5 year exploration deal in the North Field. The project has faced mounting difficulties and last year, one of the wells in Block D turned up dry. This might be the reason behind Shell deciding not to begin drilling a second well. It was reported that Shell has made it very clear that they will not want to be drilling a second well as they feel it is not economically feasible. A Shell spokesperson has said that they are negotiating with PetroChina and Qatar Petroleum to withdraw from the venture without going ahead with the drilling of the second well. This could cause Qatar Petroleum some difficulty as they already have deals to ship LNG to customers around the globe.

- Port Technology International

- Oilprice.com

Vol. 19 Jul - Sep 2014 NGV Transportation

NEWS AROUND THE WORLD

KOREA

CANADA

July 2014: Daewoo to Build Arctic LNG Carriers for Yamal Project

Aug 2014: Kitimat LNG Project in Jeopardy after Apache Pulls Out

Korean shipbuilder Daewoo Shipbuilding & Marine Engineering (DSME) won the tender to build nine icebreakers to transport liquefied natural gas (LNG) for the project. Russia aims to exploit 1.25 trillion cubic feet of natural gas from the Yamal Project in Western Siberia. Novatek, Total and Comprehensive National Power (CNP) are to jointly invest US$200 billion on the project. The orders for the icebreakers have come from companies; Teekay of Canada and Mitsui OSK Lines of Japan (MOL). According to the agreement, Daewoo will build six 170,000 cubic feet Arc7 ice-class LNG tankers for Teekay and three similar icebreakers for MOL. The estimated value of the nine ships amounts to more than 2.8 trillion won. An Arc7 LNG tanker is 299 meters long and 50 meters wide. The ship can break ice as thick as 2.1 meters. This is so far the largest iceclass LNG tanker in the world. - The Inside Korea

THAILAND July 2014: New PTT Chairman Planning Overhaul PTT’s board and executives are working closely to come up with a new business plan to firm up their business direction till 2028 – which will be PTT’s 50th year since conception. The revamp has been deemed necessary due to PTT’s return on invested capital having been on a steady decline for many years due to government subsidies on LPG and CNG prices. PTT has said that they have to bear the heavy burden of

NGV Transportation Vol. 19 Jul - Sep 2014

almost 30 billion baht (US$0.93 billion) each year for losses in LPG and CNG businesses which are expected to continue in the coming years. Since LPG and CNG have become popular, PTT’s ROIC is at 9% which is below the 16% average of listed utility and energy companies on the Thailand Stock Exchange (SET). PTT plans to secure more energy supplies as domestic reserves are expected to be

The planned LNG project in Canada faces an uncertain future as its US partners have pulled out of the project. Apache Corp has said that they are going to exit this project and the Wheatstone LNG project in Australia. Apache CEO, Steven Farris has said that, “It was largely a matter of timing, as LNG terminals take years to build; it makes sense for someone else to own it that has a different time horizon than we do.” Apache has said that they are keener to make its North American onshore operations the focus of its business, and is also weighing its options when it comes to its international holdings. their activist hedge fund, Jana Partners to restructure and it is rumoured that this could have something to do with them pulling out of the projects. - CBC News

exhausted by 2022. The firm has said that it will focus more on biofuels and bioplastics. Since 2012, PTT has allocated 3% of net profit for innovations from upstream to downstream petroleum businesses including biofuel and bioplastics. PTT has also already begun development of a 7-billion-baht polybutylene succinate bioplastic production plant in Rayong province, with operation scheduled to start next year. - Bangkok Post

NEWS AROUND THE WORLD

POLAND August 2014: Poland to Get Baltic LNG Terminal on Time as Costs Increase Poland is set to have their LNG terminal up and running by mid-2015 in an effort to curb its reliance on gas imports from Russia. The terminal being constructed at Swinoujscie which was originally supposed to have been completed by last June will allow Poland to import 5 billion cubic metres of gas by sea. Poland currently imports 10 billion cubic metres of gas from Russia. The country is speeding up the development of domestic shale gas deposits and expanding its reach to its neighbours to further diversify their supply of gas before its contract with Russian energy giant Gazprom expires in 2022. The Swinojscie terminal has

suffered cost overruns since a group of companies led by Italy’s Sapiem SpA (SPM) won the contract in 2010. Poland agreed to pay 13% more than the original budget last year which brought the total cost to 2.37

GREECE

NIGERIA

July 2014: Greek Tanker Firm Orders LNGConvertible Tankers

July 2014: Nigeria LNG Global Market Share Slips as Bonny Expansion Stalls

billion zloty (US$762 million). This increase is said to be due to the change of some laws that have led to the increase in construction costs in Poland. - Bloomberg

Maran Tankers Management a subsidiary of Angelicoussis Shipping Group, has ordered 4 tankers from South Korea’s Daewoo Shipbuilding and Marine Engineering Company for US$400 million. The tankers will have the potential to be converted to LNG powered engines. Greek ship owners have reportedly been in talks with Qatar over obtaining gas from them to use as a marine fuel.

Nigeria LNG Limited (NLNG) has said that it has been gradually losing LNG global market share due to the delay at the expansion at the Bonny LNG plant in the Niger Delta. The Bonny plant produces 22 mmtpa and the plans to increase the output to 30 mmtpa have failed to come to light. NLNG was previously the world’s 10th largest supplier of LNG but in more recent times has lost a significant portion of market share to international competitors. It is therefore imperative for NLNG to increase its production or suffer loss of further market share. The delay is going to cost Nigeria US$2.5 billion per year in potential revenue. The project is held by NNPC (49%), Shell (25.6%), Total (15%) and Eni (10.4%). The projects owners have continued to postpone the final decision on the 7th train even though export contracts have already been signed by Japan, China, India and Malaysia.

- Ship & Bunker

- Platts

Vol. 19 Jul - Sep 2014 NGV Transportation

NEWS AROUND THE WORLD

INDIA

GHANA

July 2014: GAIL to Buy One Third of LNG Ships from Indian Shipbuilders

August 2014: Quantum in $500m Deal with Golar to Build Ghana LNG Terminal

Confronted with the prospect of a second presidential directive, GAIL has decided to buy from Indian ship builders a 3rd of the LNG ships for bringing gas to the US. GAIL wants 9 ships to bring LNG from the US to India. The previous oil secretary Vivek Rae saw GAIL’s contract as an opportunity to push the case for domestic LNG ship building. After Vivek Rae, the current oil secretary Saurabh Chandra nudged GAIL to reserve a part of the US$7.6 billion contract for Indian shippers so that big players would transfer LNG shipping technology to India. GAIL has said that, “Under the advice of Ministry of Petroleum & Natural gas, GAIL will shortly come out with a LNG ship charter hire tender specifying, inter-alia, that one ship out of every lot of three ships each would be built in India”. GAIL has decided to give local shipbuilders an extended timeframe to complete the ships as compared to foreign firms. They have given Indian builders 6 years whereas foreign firms have a deadline of 2.5 years. GAIL has also said that it has signed long term agreements with the US based Cheniere Energy Partner and Dominion Resources for transportation of 5.8 million tonnes per annum of LNG from Sabine Pass and Cove Point terminals. It plans to charter newly built ships to transport this gas to India. - The Economic Times

JAPAN July 2014: MOL to Launch Arctic Ocean LNG Route from Russia’s Yamal in 2018 MOL has said that it will be transporting LNG through the Arctic Ocean in 2018 via LNG tankers which it has recently ordered from Korea. The route which has previously been blocked has now become open due to the melting of the ice in the Arctic. The new route through the Arctic Ocean will enable the gas to arrive from the Yamal plant to Europe in about 11 days, and Northeast Asia including Japan in about 18 days.

- Ventures Africa

- Reuters NGV Transportation Vol. 19 Jul - Sep 2014

Quantum Power Ghana Gas a subsidiary of industrial investment group Quantum Pacific, the industrial investment group owned by Idan Ofer, disclosed that it has a signed agreement with Golar LNG to build a US$500 million LNG terminal. The project is expected to save power producers in Ghana more than US$0.25 billion dollars in annual fuel costs. The project took 18 months to be developed with some of the world’s best engineering crews. The terminal will be situated offshore by the eastern port of Tema. The terminal will provide gas directly to the Volta River Authority which is Ghana’s main generator and supplier of electricity. According to the agreement, Golar LNG will provide an offshore floating storage and regasification unit (FSRU) which is being constructed by Samsung Heavy Industries in South Korea. A deal between Quantum and Technip is reportedly being discussed for Technip to construct subsea and offshore pipeline networks to deliver gas to Tema. The terminal is expected to have an initial capacity to deliver 250 million cubic feet of LNG per day. Power generation has been quite a burden to the country as it suffers from a failing power infrastructure and an inability to front US$20 million every 2 weeks to purchase light crude oil for heat generation. This terminal will hopefully cut the costs that are being spent to purchase light oil for power generation.

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MRU Mobile Refuelling Unit

Interview with Mr.Jonas Giuliani of Safe S.p.A

Jonas Giuliani, Safe S.p.A. Asia Pacific Markets Development Manager

he Mobile Refuelling Unit or MRU stands tall as the latest, most quick and practical solution to the lack of infrastructure development surrounding the use of NGVs. Currently in order to refuel trucks transporting payload to and from mine sites requires the construction of extensive gas pipelines and gas stations. This can all be an extremely costly affair for a relatively temporary use. The

NGV Transportation Vol. 19 Jul - Sep 2014

Changing the face of NGV refuelling

MRU allows for the fuelling stations to be moved together with exploration or mining works as part of a motherdaughter refilling system. In order to find out more about these MRUs we’ve had a chat with Jonas Giuliani, Safe S.p.A. Asia Pacific Markets Development Manager. Mr. Giuliani has more than 7 years of experience in the Natural Gas industry and has been working with Safe since 2010. Safe specializes in natural gas compression for CNG and related equipment for CNG stations. Safe has designed and built their own MRUs which are able to run completely independent from external resources. NGV Transportation: Hi Mr. Giuliani, thanks for agreeing to answer some of our questions on Mobile Refuelling Units or MRUs. Jonas Giuliani: No problem, your questions are welcome and it will be my pleasure to answer them. NGV Transportation: What are the costs of setting up and operating a gas station as compared to purchasing and operating an MRU?

JG: Without considering the cost of the land, the cost of equipment for setting up a fixed station as compared to an MRU is generally triple or higher. It is also important to note that a station connected to a pipeline, especially in Indonesia, requires additional equipment such as a ‘scrubber’ and ‘dryer’ due to the pipeline gas composition. The MRU acts as a daughter station. This implies that the gas is already purified and has had H2O and other contaminants removed at the mother or online station. Additionally the MRU includes everything in o ne package – the non lubricated compressor, the main drive with gas engine, the liquid cooling system, the control panel and the dispenser. In a mother or online station, all these items are supplied separately and must be installed and interconnected. The price to set up a station may be calculated by taking into consideration the working time for the installation and civil works. Both of these factors are not considerations when setting up an MRU. NGV Transportation: Impressive, that’s quite a significant amount of savings.

SPECIAL REPORT

What sorts of MRU types are currently available on the market? JG: There is a distinction that needs to be made in perception in the market. It is one thing to place a compressor on a trailer and call it an MRU and it is another thing to provide a solution like we have at Safe, which is an all-inclusive mobile refuelling unit. All our equipment is fully integrated and installed within one module and put on a trailer. It is totally independent from any external power supply. If the solution is not fully integrated, often you may find an external power genset for feeding the mobile station. Sometimes the dispensers are still placed on the ground and have to be installed and connected separately. NGV Transportation: What are some of the important aspects to consider when selecting an MRU? JG: Important aspects to consider are design, capacity, pressure and power. NGV Transportation: Could you go through with us each of these aspects in more detail? JG: Certainly. When looking at design, it is important that the unit should be compact enough to fit on the trailer with all the items fully integrated and interconnected. Of utmost importance is that the compressor is a non-lubricated design so that any oil carryover to the vehicles is limited, preventing engine damage. The discharge gas temperature should also be as low as possible in order to maximise the vehicles filling. This is generally achieved by

a liquid cooling system, as equivalent sized air cooling systems are of a lower efficiency. Capacity is important in order to be able to refill not only small but also medium sized and large vehicles such as buses and trucks without losing efficiency and increasing filling time. Pressure is very important on both sides; inlet and outlet. At Safe, our design permits an inlet pressure as low as 10 barg, which means that you can empty the storage on truck best by maintaining a proper filling capacity and outlet pressure (at 250 barg always), while other designs have minimum inlet pressure at 20 or 30 barg. Higher residual pressure in the storage at 20 or 30 barg equals to 15-20% non-utilized gas, means reduced efficiency and increased logistics cost because one cannot use sufficient gas from the trailer. The consequence is that you sell less per trip and the rest is just shifted back and forth, to and from the mother station. Other designs do not have multistage compressors and cannot achieve 250 barg outlet pressures in every inlet pressure condition. Therefore time is spent in the recompression of the gas within the storage banks. Filling time to the vehicles increases. Such compressors generally also don’t have very low inlet pressure availability. Last but not least, a very important aspect is the installed power. The less power required, the more efficient the system will be, taking into consideration also the issues when looking at capacity and final pressure as I’ve previously mentioned. Putting a big compressor on

a trailer to achieve higher capacities is nothing special Installing a self-sufficient system without external power supply, with high capacity, a variable inlet pressure compressor and guarantee of maximum pressure in all the operating conditions is very relevant for making a successful choice of the equipment in order to have proper return on investment of the project. NGV Transportation: Thanks for that. One last question, would you be able to go over any specific safety issues or concerns attributed to MRUs? JG: Sure. At Safe, our design is according to EU standards and safety guidelines. Specific issues may be caused by the location of setup of the MRU by whether or not it is going to be located near to a more or less dangerous place. But within its own design all our equipment is designed in ‘fail safe’ mode with redundant controls and safety provisions which are electronically, electromechanically and/ or mechanically controlled. Everything is automatic in its safety aspects. There are also manual Emergency Shutdown provisions that are installed in the case should any emergency occur which is not directly related to our equipment. NGV Transportation: Thanks so much Mr.Giuliani for your input on this matter. You have certainly helped us in our understanding of MRUs and provided us with invaluable information. It has been a pleasure speaking with you.

Vol. 19 Jul - Sep 2014 NGV Transportation

SPECIAL REPORT

s part of our evaluation on MRUs we also spoke to a couple of companies that have recently purchased some units from Safe. We approached Mr. Fazal Ali Khan of Emirates National Oil Company (ENOC) and Mr. Nori Muharam of PT Gagas Energi Indonesia (GEI) on their experience with their respective units so far. NGV Transportation: Hi Mr. Fazal and Mr. Nori, so glad that you were willing to take the time to tell us more about your experience with the unit so far. We are extremely keen to hear about your feedback on your MRU. Fazal Khan: We would like to thank you for your interest in our MRU operations. So far we have been very pleased with our unit and it continues to work perfectly without any complications whatsoever. We actually purchased a compressor unit that has been mounted on a mobile unit. The mobile unit has a large enough capacity to fill up to 50 vehicles and can last for 2 days before it requires refuelling itself. The vehicle currently is moved about from three separate refuelling locations throughout the day. The only issue that we have at the moment is that due to government regulations on vehicles carrying flammable gas the MRU is only allowed to be hooked up at specific pre-approved areas. The government has enforced strict safety standards and requires that the MRU be equipped with GPS to enable 24 hour tracking.

to the people and extend its reach. This year, in aim of supporting the Indonesian Government’s acceleration program for conversion from oil fuel to gas fuel, the GEI has made plans to build 12 online gas stations and operate 4 MRUs which will bring its total number of gas stations in operation to 16. So far there have been no problems whatsoever with our use of the MRU. The daily costs for the MRU are a little bit higher at around 0.2 – 0.3 USD/LSP (Premium Petrol) from from the Mother Station depending on the distance of the source gas. Refuelling time is about 4 minutes for each vehicle per 5 LSP, depending on the tank volume at the time. As for improvements we feel that as there are currently only 2 connections from the dispenser, it would be preferable to have one or two more.

Nori Muharam: Thank you for your enquiry about our MRU operations and initiatives at GEI. The MRU has been purchased with the objective of enhancing and strengthening our parent company PT PGN’s (Perusahaan Gas Negara) downstream businesses. We currently have an initiative in place “To be the leading energy provider company in Indonesia in natural gas and its derivative products.” Related to these profiles, the company has contributed in the utilization of natural gas in various sectors; industrial, transportation, electricity and household. In 2013 the company entered a new era of natural gas provision for the transportation sector by operating the MRU and celebrating inauguration of first Gagas’s online gas stations (SPBG) in Pondok Ungu Bekasi. With this breakthrough, GEI expects to contribute more

NTM

NGV Transportation Vol. 19 Jul - Sep 2014

By Ryan Pasupathy

D 3R A N N A U L

28 – 30 October 2014

250 International and Regional VIPs and C-Level Decision Makers 30 Industry Experts and Thought Leaders 3 Days of High-Level Discussions and Exclusive Networking Opportunities 1 Strategic Level Event Focused on Multilateral Cooperation to Connect Gas Markets The Expected Rise of Import Volumes Required to Sustain Growth for the two Fastest Growing Economies: Strategy and Opportunity

Tuesday 28 October 2014 Pre Event Workshop

China’s promised gas demand growth, what is China’s gas strategy? What volumes of Russian piped gas will cross the border? The impact of shale gas by 2020 Chinese pipelines: The complexities that exist with pipeline infrastructure: planned extensions, access etc How will India cater for growing energy demand? What is their gas strategy? How will India balance the import vs export of gas? Sustainable LNG trade with Asia – key commercial drivers Common contracting issues with sales purchase agreements, regulatory implications and uncertainties

Wednesday 29 October 2014 Ministers Dialogue: Promoting Regional Partnerships for Gas Markets Energy Mix: What Role Does Gas Play in Energy Security? Panel: Gas Trade in Asia Unlocking Gas Demand in Liquid Fuel/ Coal Dominated Markets New Supply Markets: An Overview of New Supply Players and How new Volume will Change Dynamics in Asia

Speakers Include:

Thursday 30 October 2014 The Expected Rise of Import Volumes Required to Sustain Growth for the two Fastest Growing Economies: Strategy and Opportunity

Karthik Sathyamoorthy, Head of Asia, Galway Group

Gas and LNG as an Alternative Resource for Power Generation Innovation and Technology Impacting LNG Markets Panel: Asia as a LNG Trading Hub

Professor Keun-Wook Paik, Senior Research Fellow & Associate Fellow, Oxford Institute for Energy Studies (OIES) & Energy, Environmental and Resources Programme, Chatham House

Save USD$500 when you book before 30 August. To book your place at the Summit, please contact Shunker Goel on +44 (0) 7889 720 294 or Andy Beales on +65 6422 1475, or email info@gasasiasummit.com for more details.

www.gasasiasummit.com Platinum Sponsor:

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FEATURE ARTICLE

NGVs Driving the Green Revolution

in Mining

ow can we get more for less? Itâ&#x20AC;&#x2122;s a question we ask ourselves every day, prior to doing just about any activity and especially when presented with new opportunities. How can we maximise our rewards in this venture? This inquisitive and gain oriented mind-set is the ongoing driver for innovation and ingenuity. From the smallest of things such as using an electronic toothbrush to buying a second can of Coke at a discount with the first; we always want to get

NGV Transportation Vol. 19 Jul - Sep 2014

the best bang for our buck. Now imagine applying this when extracting gold from the earth. You would want to do the same, wouldnâ&#x20AC;&#x2122;t you? Mining continues to rake in billions of dollars in profit year after year. Even if we are mining for gold, coal or rareearth-elements, as exploiters of the planet we never seem to have enough. As the global population continues to rise, our needs as a species continue to grow with it as well. We have a limited supply of natural resources present within the earth and it is slowly becoming

more difficult and more expensive to mine the same minerals from deeper within the earth. A key component in the decision making process of a mining feasibility study is the cost. It has to be economically viable to spend billions of dollars in investments to retrieve the payload from a specific setting and deliver it for processing. If the extraction and transportation costs outweigh the sale cost of the payload, the project will be deemed unfeasible. As technological revelations come to pass we have become able to significantly reduce the costs that are required for extraction. Though it does take time for trends to develop and global movements to occur, anything that has the ability to reduce costs will eventually find some form of practical application in this industry. Disruptive Technology One of these technological revelations is the natural gas engine. While not a new idea, natural gas engines were first used in 1939 but have become ever more appealing to fleet owners in recent times, having been introduced for heavy duty vehicles only in the late 1980s. Together with the flooding of cheap gas from the United States and the shale gas revolution, touting an abundant supply and greater mileage, natural gas vehicles have caused several ripples in a previously diesel dominated part of the industry. The disruptive effect of this technology is also partly due to an increasing number of clean energy reforms and the global movement to reduce greenhouse gas (GHG) emissions. When paired up with cost savings, only slight incentives need to be provided by governments in order to gain support from the industry. This is what is happening all over the world. Industry giants are moving

FEATURE ARTICLE at a somewhat leisurely pace in making the change and saying goodbye to those dirty old diesel engines but nonetheless are still making headway in this direction. An International Energy Agency (IEA) study conducted in Germany on heavy duty vehicle (HDV) NGVs found that on average the HDV NGVs tend to emit 34% less CO, 24% less NOx and 79% less particulate matter than their diesel counterparts. Density Downer The initial apprehension to using gas as a fuel for these transport trucks is the fact that natural gas has a lower energy density. A litre of natural gas simply cannot compare to the energy that can be produced from a litre of diesel. Natural gas only has 25% the energy content that diesel has. This means that the trucks will be able to carry fewer payloads due to having the need to carry more fuel. On top of this, the cylinders that hold the gas also can weigh more than 1000 kg. The potential for the use of gas as a vehicle fuel has been undermined by its poor energy density. The solution to this problem though has to come from the use of LNG instead of CNG. Though LNG still only has an energy density of 60% to that of diesel, this is enough to make it a cost effective alternative. LNG is slowly becoming more popular and people are beginning to understand its rightful place as the best fuel option for their HDV mining needs. What is missing from having a full-on, mass conversion is the lack of existing LNG infrastructure. There are not enough regasification and storage terminals to allow for a comfortable switch for all interested parties. When there is a lack of government support and incentive, converting one’s fleet can mean having to bear all these extra costs. Hopefully with more joint ventures and greater government involvement, more

infrastructure will be developed which would allow the burden of cost to be spread and the rewards to be shared. Implied Savings Due to the current lack of infrastructure, many companies are releasing dual fuel engines. These engines are able to run on both fuel types including a mixture of diesel and CNG or LNG. The engines are for powering large haul trucks carrying up to 300 tonnes of cargo. The trucks basically perform the routine duties of carrying payload and waste material from excavation sites to processing plants and dump sites which are not located very far away. A diesel fuelled engine would typically chow down on close to 250 litres of fuel an hour making this one of the largest operating expenses of mining companies. Some dual fuel engines boast savings of up to US$800 per day for trucks operating within the United States. More modest calculations though, put annual savings in the region of US$27,000 at an annual consumption of 95,000 litres of LNG. Even if natural gas supplies are not always readily available, the savings can become quite significant. Unfortunately, the conversion of one’s fleet means having to incur certain upfront costs. New engines and conversion kits are not cheap. Capital investment for new engines or vehicles can be anywhere between US$80,000 to US$100,000 per truck. Using these figure the estimated payback of initial investment can be expected within 3 years. Market Opportunity According to Westport, in 2012 there were over 28,600 haul trucks that were above 100 tonnes being utilized by the top 10 mining companies in the world that were still running on diesel. This is quite a large number of vehicles which

can be converted or replaced. Investing in infrastructure can be quite profitable in certain regions where there is a large enough of a market for large scale conversions of HDVs. Some areas with such potential are Australia, North America and Eastern Europe. As investing in natural gas infrastructure becomes a profitable venture in more areas, further opportunities will open up. The establishment of infrastructure makes it possible for gas at the mine site to be used for power generation, process heating and LNG sales to support transportation of other raw materials and processed products. Domino Effect It so happens that this ‘chicken and egg’ situation ends up working itself out. This is however, determined by the location as gains could be limited or not worth the while. An example where this would not work would be at a mine site which is on the far side of its life cycle and production is close to its end. By increasing the number of NGVs, the amount of infrastructure will slowly develop. Together with the development of infrastructure will come an increased number of NGVs that will not only be limited to haul trucks. Other transport vehicles performing various tasks within the mining industry such as buses bringing workers from airports and tankers carrying water could all be converted to use natural gas as a fuel. This essentially results in the cleaning up of emissions and CO2 production from mining activities on a monumental scale. This “Green Revolution” in mining has already begun to take place. CNG and more importantly LNG are finding their niches within the mining industry and are the preferred fuel option right now if one is looking to save on costs. NTM

By Ryan Pasupathy

Vol. 19 Jul - Sep 2014 NGV Transportation

Flow Meters for Natural Gas:

Optimization for Fuel Savings

s we ponder over new methods to maximise the efficient use of gas, we might eventually come to the conclusion that the best way to get this done is to tackle the issue right at the very roots â&#x20AC;&#x201C; ensuring optimum use of resources. Our resources in this case is natural gas and our â&#x20AC;&#x2DC;rootsâ&#x20AC;&#x2122; is the combustion process. The core idea in optimizing combustion is the removal of excess oxygen from the burning

NGV Transportation Vol. 19 Jul - Sep 2014

process as this reduces heat lost from incomplete combustion of partially burnt fuel. Flow meters are commonly used to track the total gas consumption of an entire facility and as there is an increasing emphasis on monitoring operational processes to increase efficiency. These contraptions basically quantify the bulk movement of the fluid passing through the pipe. The information provided by the flow meters is essential for facility operators to identify which areas

of their process tree are not operating efficiently and thus are able to then act on this to optimize combustion performance. The figures recorded by these tools provide operators with invaluable data, allowing them to decipher optimal air to fuel ratios at the various stages of fuel usage to maximise productivity. This air to fuel ratio is important in ensuring that there is a limited loss of heat and a reduced release of hydrocarbons. Excess release of hydrocarbons leads

to longer maintenance periods for cleaning. Reducing this downtime period thereby leads to higher productivity which correlates directly to energy savings. Accurate flow meter measurements can also assist in helping users adhere to emission regulatory requirements. There are a number of flow meter variants that have their own specific applications. It can be quite a daunting task when trying to consider oneâ&#x20AC;&#x2122;s options, especially in such a fast growing industry, so weâ&#x20AC;&#x2122;ve broken down their method of action for you and discussed the pros and cons of the various types. Orifice Plate This is the traditional method of flow measurement for gas and liquids. It is basically made up of a plate with a hole that is smaller than the diameter of the pipe. The plate is positioned in the center of the 2 flanges and as the gas is forced through the smaller hole, the pressure decreases creating a lower pressure on the downstream side of the plate. Flow is then measured by the pressure drop across the plate. The thing about this type of flow meter is that, though relatively cheap, it is necessary for the system to be equipped with a temperature transmitter, a pressure transmitter and a flow computer to attain a mass flow measurement. The necessity of these additional parts to the system does make it a somewhat more costly alternative to other flow meter options. There are a couple of additional issues that accompany orifice plate type flow meters â&#x20AC;&#x201C; the range and turndown. The turndown ratio or rangeability is the ratio of the maximum and minimum volumes of gas that passes through the device on daily basis. This presents itself as an issue with the orifice plate

because measurements are made through the use of differential pressures. When calculating flow rates using differential pressures, the minimum volume is at zero at when there is no flow but it increases with the square of the flow rate. This means that at very low flow rates this causes there to be a very low signal which in turn limits the ability of the device to accurately measure flow rates. Vortex Flowmeters These flow meters make use of a bluff object or shredder bar that is placed in the flow path of the gas. As the gas passes over this bar, vortices are created from both ends of the bar. The vortices are created one after the other on either side of the bar as it affects the flow of the fluids. The frequency of vortex generation is what is used to calculate the speed of flow of the gas. One thing about this type of flow meter is that it tends to require a reduction of the pipe size in order to increase the speed of the flow such that vortices can be generated. The vortices are counted using a variety of methods that make use of either piezoelectric crystals or a mechanical sensor that measures the speed of the passing vortices. This method is also insensitive

to pipe born vibrations up to 1 G, pressure surges and temperature shocks which will have no effect on the measurement. Turbine Flowmeters Turbine type flow meters are extensively used in this industry for natural gas flow measurement. This device works by having a turbine based free spinning rotor that is spun round by the flow of gas. The number of rotations are counted by an external pickup that releases a series of electronic pulses which are received by a transmitter, allowing one to calculate the flow rate. Turbine flow meters are praised for their high turndown ratio capabilities and high accuracy. It should be noted though that gas cleanliness is an issue due to the moving rotor which does not function well in poor quality gas streams. The meter does require pressure and temperature compensation and also has a minimum flow rate. Turbine flow meters should also not be operated at high speeds as there is a risk of premature bearing damage from this. Ultrasonic Flowmeters The ultrasonic version of this device works by measuring

Vol. 19 Jul - Sep 2014 NGV Transportation

the d iffe re nce be t w e e n the transit times of ultrasonic pulses that have been sent by a downstream transducer to an upstream transducer and vice versa. These transducers can both transmit and receive ultrasonic signals. Basically the setup involves having these transducers placed on opposite ends of the pipe facing each other, firing signals that are generated by piezoelectric crystals. When an ultrasonic signal impacts a sensor these crystals create a voltage. The measurement is made by calculating the difference in the speed of the signals accelerated in the direction of flow and the impeded speed of the signals going back against the flow. This differential transit time is measured by the sensors and is directly proportional to the flow velocity in the pipe. An interesting development with this sort of technology is that it can be retrofitted externally onto the pipe. With this clamp-on system the ultrasonic signal is passed directly through the pipe wall and into the fluid. This is popularly used in LNG setups due to its non-invasive nature. One thing to note about these types of flow meters is that its accuracy is somewhat limited when looking at measuring the flow rates of gas to individual combustion sources. This is because the flowmeters have a high minimum operating pressure due to the relatively lower velocities of gas flow to individual sources. Coriolis Mass Flowmeters Coriolis mass flow meters get their name from the Coriolis Effect which is basically the changing of angular velocity in a curved pipe. It makes use of the fluctuations of the movement of the substance that is flowing through the pipe. In order to better understand the way this

NGV Transportation Vol. 19 Jul - Sep 2014

works, we can try to imagine a bent piece of hose that only twists once pressure has been applied. This is caused by the water as it passes through the pipe. In a Coriolis mass flow meter there are two of these identical tubes that are equipped with an electromagnetic exciter. When there is no flow in the tubes they both oscillate symmetrically but when a mass flows through the tubes, they deform proportionally to the mass flow rate. This deformation or twist is picked up and registered by two sensors which take measurements. This form of flow rate measurement is considered to be highly accurate with high turndown ratio capabilities and is also insensitive to change in temperature, pressure, density or gas composition. Though this is extremely useful in measuring individual combustion sources, it becomes somewhat expensive for in-plant measurement of gas. Thermal Mass Flowmeters As the name suggests, these flowmeters measure heat transfer that is caused by the flow of gas over a heated surface. Measurements are then made based on the difference between two temperature sensors that are located within the flowmeter. One of these temperature sensors measures the actual gas temperature as a reference regardless of the flow velocity. The second temperature sensor is heated constantly by electricity so that a predefined temperature difference is maintained between the two sensors. Heat from the heated temperature sensor is carried off by the gas that flows over it and the corresponding cooling effect is measured and compensated by adding more heating current. The heating current required to maintain the temperature difference is proportional to the cooling effect and is therefore a

direct measure for the mass flow within the pipe. Thermal Mass Flowmeters are also able to be retrofitted onto exiting pipelines using a simple device called a Natural Pipe Thread (NPT) connection. These flow meters also offer high turndown capabilities, where a turndown ratio of 100to-1 is easily attainable. In addition to being able to handle high turndown these flowmeters have a lower flow sensitivity allowing them to measure flow rates which are very low and still produce accurate readings. Spontaneous Combustion That just about sums it up â&#x20AC;&#x201C; perhaps weâ&#x20AC;&#x2122;ve helped you understand more about your flow meter options. I would recommend always speaking to your flow meter specialist when considering which type of flow meter would be most suitable for you. Identifying and isolating areas of poor productivity should be the priority of every business. Ineffective steps in the process chain should be removed as quickly as they are discovered. By closely monitoring your air and fuel rates, you will be able to make the necessary adjustments to increase performance and improve productivity. In order for you to continue to enjoy continued success in our achievements, you need to continue to rethink your work processes and consistently remedy poor practices. There are many places where this can be done but why not start right here? Weâ&#x20AC;&#x2122;ve already equipped you with some basic knowledge and you should now be ready to begin optimizing your air-tofuel ratios for more efficient fuel use, so you can blissfully enjoy your new found energy savings!

NTM

By Ryan Pasupathy

FEATURE ARTICLE

Heavy Duty Savings â&#x20AC;&#x201C;

HDV Conversion The unyielding global concern over rising levels of air pollution, carbon emissions and climate change, have given fleet owners invigorated impetus to switch to cleaner fuels. Though environmental factors and government pressure can be a strong driver for change, changes in this industry are normally associated with some form of CAPEX or OPEX reduction. Thousands of natural gas fuelled HDVs have replaced diesel fuelled alternatives over the last few years. Old vehicles have been already been retrofitted with gas engines or have been completely scrapped and replaced. Largest conversion success has been in long haul trucking and high horsepower vehicle applications. These vehicles are generally vehicles providing pickup and drop-off functions such as transit buses, dump trucks and delivery trucks. These vehicles need to travel vast distances with heavy cargo and the realized cost savings can amount to hundreds of thousands provided one has the time to invest.

an we continue to rely on natural gas to fill areas that have been dominated by conventional fuel sources? Perhaps the true beauty in this energy source is that the possibilities are somewhat

NGV Transportation Vol. 19 Jul - Sep 2014

endless. Natural gas has seen itself taking on a myriad of fuelling responsibilities as the mass appeal for this clean fossil fuel alternative has continued to grow over the last decade. One of the latest trends has been the use of natural gas as a heavy duty vehicle (HDV) fuel.

Location, location, location So just how exactly does one go about accumulating these cost savings by switching to natural gas? Well, hold on to your socks â&#x20AC;&#x201C; all will be revealed in good time. There are a few factors that need to be evaluated in order for you to determine your best possible course of action. The primary and most important factor to consider would be the location. Depending on the country of operation, the existing infrastructure will determine the type of gas options that are available. Does the country have LNG or CNG

FEATURE ARTICLE

refuelling stations? Are gas prices subsidized by the local government? Are there supply chains already in operation for transport and delivery? The presence of enabling gas infrastructure is the key to the successful conversion of one’s fleet. Some however may argue that ‘vehicle function’ is the most important consideration but I believe this takes second place to infrastructure availability. I say this because establishing a new supply chain and looking at setting up new infrastructure where none exists is not cost saving in the least. The heavy burden of this task is often undertaken by large capital intensive companies that are able to bear the extravagant costs. Such companies also tend to work closely with relevant government organisations as local government support greatly e nhance s the like lihood of implementation success. Underhood Augmentation The type and purpose of the vehicle under consideration for a gas retrofit will already have a predisposed function. Depending on the vehicle class – whether it’s a bus that travels 200km a day or if it’s an 18 wheel long-hauler that makes 500km round trips, the gas engine options are different. You’ll have to scour the market for the various options that are available in your respective part of

the world but in most cases there are always options. Original Engine Manufacturers (OEM) such as Landi Renzo, Cummins, Westport, Iveco and Peterbilt have a range of gas engine options available for almost all types of HDVs. A complete vehicle overhaul is not always required as some companies offer conversion kits that can be fitted into an existing diesel engine. These companies generally offer two different types of engine technologies; Spark Ignited (SI) and High Pressure Direct Injection (HPDI) engines. SI engines normally run on CNG. These engines experience a reduction in

efficiency of about 10% compared to regular diesel fuel variations. This type of engine is normally the preferred choice for buses and refuse dump trucks. HPDI engines are being used in large Class 8 trucks and run on LNG. The ISL G 8.9 litre is one of the most popular models commercially available and is developed by CumminsWestport. These engines do not suffer from the operating efficiency that SI engines do and are able to run at the same efficiency as diesel engines. Most of these OEM vehicles and engines can be run in bifuel and dedicated modes. This however requires that there be two separate fuel tanks; one for diesel and one for natural gas. This can be done by simply pressing a button. Conversion systems are normally installed by the system manufacturer or a qualified system retrofitter. Different countries have different requirements and safety measures for their NGVs. In some countries it is a necessity for the conversion to be performed by a licensed technician. A Breath of Fresh Air The sad thing about our dirty mistress; diesel, is that she has a seriously detrimental effect on air quality. Natural gas engines have

Emission Reductions of Natural Gas Vehicles Compared with Similar Models of Diesel Vehicles (Percent Difference) Emission

CNG Delivery Trucks

LNG City Buses

LNG Semi Trucks

-95

NSS

-96

NOx

-49

-17

-80

NMHC

-4

-96

-59 <diesel THC

-75

-95

+263

LNG Refuse Trucks -86 -32 -64<diesel THC +80

*NSS - Not statistically significant, THC - Total Hydrocarbons [Washington Metropolitan Area Transit Authority; Compressed Natural Gas Transit Bus Evaluation, Technical Report NREL/TP-5w4037626. National Renewable Energy Laboratory]

Vol. 19 Jul - Sep 2014 NGV Transportation

FEATURE ARTICLE a huge advantage over particulate matter (PM) emissions over diesel. These natural gas engines can produce up to 90% less PM. High PM readings are associated with the occurrence of lung cancer and other forms of breathing related diseases. This issue is especially pertinent at mining and construction sites which have a lot of incoming and outgoing vehicles from the site. This has immediate consequences on the health of all workers on site. Conversion is not just an option that is better for the environment but it is a choice that could save lives. Various studies have been carried out and report results of a reduction of CO2 from 15-25% depending on the vehicle type and application. One particular study in 2006 made a comparison of emissions from HD-NGVs to regular diesel fuelled models and showed significant GHG emissions reductions except CO from LNG Semi rucks and LNG refuse trucks. The EPA and the EU have made recent proposals to amend the CO2 allowances for HDVs tightening up on emission standards. A lot of countries also offer numerous GHG credit programs and state incentives for HDVs making use of natural gas engine technology. These incentives are often in the forms of reimbursements and subsidies. These are signals of strong support from the government and support from the local authorities is often essential to implementation success. Return on Investment The cost required to develop and commercialize a gas engine can be quite extensive to OEMs which is why these gas engines can be quite pricey. High capital investment is the biggest deterrent for fleet owners considering conversion. It needs to be realized though, that despite these initial high start-up costs the rewards can be outstanding. The cost saving factor of converting one’s fleet is realized mainly through the cost differential of using diesel on its own compared

NGV Transportation Vol. 19 Jul - Sep 2014

Heavy Duty Natural Gas Vehicles Short Haul

Medium Haul

ISLG

Westport HD 2010

Engine Type Fuel Type

LNG ISX 2010

Base Case

Municipal Refuse

ISLG

LNG

CNG

ISX 2010

ISL 2010

US$50,000

US$75,000

Distance Travelled (per year)

9000Km

20,000Km

Lifespan

10 years

ROI Timespan

5 years

Purchase Cost

Transit Bus

CNG ISL 2010

US$40,000

US$50,000 40,000Km

75,000Km 12 years

6.5 years

1.5 years

2 years

10 years 5 years

US and Canadian Natural Gas Market Analysis: HDV Ownership and Production. TIAX

Vehicle

Fuel Type

Annual Fuel Savings

ROI Timespan

Line Haul Truck

LNG

US$27,000

3.3 years

Medium Haul Truck

LNG

US$17750

4 years

Transit Bus

CNG

US$10800

4.2 years

Forklift

CNG

US $2650

1.9 years

Study of Opportunities for Natural Gas in the Transportation Sector. Marbek

to a gas or bi-fuel engine. The average payback period does vary depending on the type of vehicle and can range from anything between 1.5 to 5 years. This time frame is based on the following assumptions as was carried out by TIAX. These figures are made with assumptions based on US fuel price differentials and that there have been Federal Tax reimbursements from the government. The payback period is highly reliant on the type of vehicle and its application. Higher savings correlate with a shorter payback period. A 2010 Marbek study found that highest savings could be realized when considering long haul truck conversions. It was also found that cost savings were directly proportional to the capital cost increment and vehicle fuel

consumption. The study came to a few conclusions; forklift conversions had the best rate of return on investment followed by line haul and transit buses. Investing in Time The key thing to take back from this is that HDV conversions can and will offer substantial returns to a business while at the same time help to reduce filthy diesel exhaust. This however, has to be done with the expectation that returns will only be realized in the long run. As one of the world’s most successful investors, Warren Buffett has said that, “Time is the friend of the wonderful business and the enemy of the mediocre”. What sort of business is yours? NTM

By Ryan Pasupathy

SPECIAL REPORT

t is evident from the number of plantation owners that are investing in biogas operations, that there are some juicy savings to be had from implementing its use. How exactly do these savings come to fruition? The main role of biogas in decreasing costs at the plantation is in reducing vehicle fuel costs. Petrol and diesel do take millions of years to form and millions of dollars to extract; not to mention that most plantations are located in isolated areas and these fossil fuels need to be brought in from the nearest petrol stations which can be many kilometres away. The main consideration when setting up a biogas plant is to pair the feedstock with the appropriate technology. Certain plantation feedstock tends to work better with different types of equipment. The idea is to explore the options that are available and then make the correct pairing, much like choosing the perfect wine to go with your prime rib-eye, only failing which would result in a much bigger catastrophe than a mere disgruntled palate. Options The task of matching your feedstock to the available technology can be somewhat complicated at first as there are quite a number of options. The easiest way to go about doing this would be to look for successful pairings that are already in operation. This implies that the technology has been tried and tested to work under the paired circumstances. This should encourage the plantation owners as it implies a high chance of success and it is also more favourable when seeking for financing. Biogas project financiers prefer solid projects with a history proven success. The main issues here are the chemical and physical make-up of the feedstock. Certain technologies prefer feedstock with a higher fermentable carbohydrate level

NGV Transportation Vol. 19 Jul - Sep 2014

Grow Your Own Gas

Save a Million Dollars on Fuel 26

SPECIAL REPORT

or dry, continuous or batch flow, vertical or horizontal plug flow and single or multiple.

while others prefer feedstock with higher oil content. Characteristics such as the amount of organic suspended solids (SS), total solids (TS), volatile solids content (VS) and chemical oxygen demand (COD) are important in determining the correct method for anaerobic digestion for the production of biogas. Feedstock can either be solid, slurry or liquid in form. Specific digesters are required depending on the feedstock characteristics and

whether the feedstock is in the form of a wastewater or a solid. There are some new digesters available on the market that can handle variable sources of effluent though this is not common. There are a number of digester systems currently available on the market. The types of technology available tends to vary from country to country but can be broadly classified into 5 groups depending on whether or not they are mesophilic or thermophilic, wet

Fuel Replacement Assuming all goes well and a proper pairing can be made with feedstock and technology, when does the plantation owner start to make his savings? The answer quite simply is, as soon as he can start replacing the diesel in vehicles to run on this delicious environmentally friendly gas. To make the biogas produced on site useable for vehicles, a couple of things need to be set up; firstly the gas needs to be made engine friendly through the upgrading and scrubbing of the gas to remove impurities and secondly, the engines of the vehicles ready to use this gas need to be converted to be ready to run on compressed (CBG) or liquefied biogas (LBG). Together with upgrading of gas and retrofitting new vehicles, additional costs involved, arise from distribution and compression of the gas. The gas cannot be used as a fuel until compressed and the gas will often have to be transported to storage facilities or for sale to industrial parks. Evonik Industries has estimated that based on a large scale oil palm plantation in Malaysia with 156 heavy duty vehicles and 2 refuelling stations, replacement of diesel with 60/40 compressed biogas from POME to Diesel can amount to savings of up to MYR3.5 million per year (US$1.09 million). Evonik also compared these results to a scenario whereby a complete substitution of diesel for CBG was done and found that partial substitution was still a more cost effective alternative. The comparison made though was with a slightly smaller scale plantation. It was found that greater savings were achieved through partial substitution due to the lower capital expenditure costs of engine conversions when looking at dual fuel engine varieties compared to

Vol. 19 Jul - Sep 2014 NGV Transportation

SPECIAL REPORT

100% CBG engines. Engine costs of retrofitting dual fuel engines were roughly half the costs of replacing 100% CBG engines. These savings are possible only due to the fact that by replacing diesel fuels with 60% biogas it allows for cushioning of the fluctuating market prices of diesel and the immense transport costs associated with bringing the fuel to the plantations. By manufacturing the biogas on-site it removes these exorbitant transport costs almost completely. The biogas can also be used to help with other on-site fuel uses where diesel is required to power machines or generate electricity should the plantation be located off-grid. Additional Savings In some cases it can become more profitable for the feedstock to undergo some processing in aim of increasing methane yield. This process assists in breaking down lignin in the feedstock, which stymies energy production.

NGV Transportation Vol. 19 Jul - Sep 2014

Essentially it is just the addition of another step in the gas production process to remove lignin from the raw feedstock before it is fed into the digester. Lignin is an organic substance which is present in the cell walls of most plants and has a stubborn habit of preventing bacteria from breaking down the feedstock to produce methane. Though the addition of this step can be quite costly to set up and thus might not be a viable option for smaller plantations it can greatly enhance the efficiency of gas production. Another option for increased savings is done by turning the CBG into LBG through liquefaction. This can actually equate to quite significant savings and even additional income provided the plantation has sufficient capital. LBG is basically a far denser version of CBG. Bringing the gas down to -162oC allows for ease of transport of the fuel as equivalent sized tanks can hold that much more fuel when in this form.

LBG is also a much more suitable fuel for heavy duty vehicles as they will be able to carry more fuel along with them without having to refuel as frequently as vehicles that run on CBG. Just as with pre-treatment of feedstock, liquefaction technology can also increase capital expenditure due to high costs of liquefaction equipment and thus might not be suitable for all plantations. Conclusion Biogas can play a pivotal role in saving fuels costs at the plantation by allowing owners to substitute diesel for biogas as a vehicle fuel. The replacement of fuel can amount to more than a million dollars in savings per year, while also allowing owners to take advantage of other such government initiatives such as bursaries and feed-in-tariffs that are associated with the use and application of biogas. NTM

By Ryan Pasupathy

ADDRESSING KEY PERFORMANCE CHALLENGES AND BOTTLENECKS TO BIOGAS DEVELOPMENT IN THAILAND

As one of the most successful Biogas markets in the region, Thailand has comprehensive and far-reaching policies and support frameworks for the development of biogas projects. However, as it is entering the next phase of development, Thailand faces a unique set of challenges and opportunities as it taps biogas resources to provide energy for an increasingly energy-hungry economy. Join the Biogas Thailand Forum 2014 as we provide clarity on the new energy targets for biogas, energy corps, power generation, safety training, and hybrid renewable energy systems. For more information, please visit www.icesn.com

Organized by:

Supported by:

ICESN Tel: +65 6506 0951 | Fax +65 6749 7293 | Email: info@icesn.com

EVENT & EXHIBITION

th ANNUAL LNG TRANSPORT, HANDLING AND STORAGE

Practical Infrastructure And Transportation Implementation For A Sustainable Natural Gas Market in Indonesia LNG

IN PARTNERSHIP WITH

FORUM SERIES

19 - 21 May 2014 | The Stones, Bali, Indonesia

LNG TRANSPORT, 4th ANNUAL HANDLING AND STORAGE

Practical Infrastructure And Transportation Implementation For A Sustainable Natural Gas Market in Indonesia

Prawira Atmaja, Deputy Chairman for Commercial Management at SKK Migas. SKK Migas is the Upstream Oil and Gas regulator in Indonesia. He delivered an important topic entitled “Indonesian LNG – Challenges Ahead”. He noted that to meet growing Indonesia’s gas demand, increasing LNG use for domestic consumption is unavoidable. Gas infrastructure will be key in facilitating the consumption growth. The next speaker was by the downstream regulator, BPH Migas. Djoko Siswanto , Secretary from BPH Migas focused on the topic “Accelerating Natural Gas Infrastructure Development To Connect Indonesia : Government’s Perspective” Djoko touched on the natural gas utilization and production in Indonesia, together with existing and upcoming pipeline infrastructure that will be built to support increasing domestic demand. Prior to the break, Hendi Prio Santoso , President Director of PT. PGN took center stage with the topic “Integrating Natural Gas Infrastructures to Markets”. PGN currently owns the biggest downstream natural gas infrastructure in Indonesia

he 4th LNG Supply, Transport & Storage Indonesia successfully concluded with over 154 delegates from 17 countries attending this business-critical forum. This event is co-organized by Allevents Group and Geo Energi Magazine. This annual forum offers a one-shot platform for all serious stakeholders to highlight their positions and distinctive solutions for Indonesia’s LNG industry while establishing relationships with key policy-makers and private sector players integral to gas LNG supply, transportation and distribution. The forum is the annual meeting point for industry stakeholders to connect, network, explore business opportunities and ultimately - enable the development of a productive and sustainable Indonesian LNG sector. This event was sponsored by Pertamina Gas, GTT, Energasindo Heksa Karya and PT Bayu Buana Gemilang. There were two exhibitors attending, PT Citra Nusantara Gemilang and PT Matesu Abadi. The keynote speaker was by Widhyawan

L-R: Widhyawan Prawira Atmaja (SKK MIGAS) & Djoko Siswanto (BPH MIGAS)

NGV Transportation Vol. 19 Jul - Sep 2014

EVENT & EXHIBITION Hendi Prio Santoso (PT PGN)

Rudiyanto (PT BKI)

Rakhmad Dewanto (Total E&P Indonesie)

and is developing to a company with a complete portfolio of gas management competencies. He touched on pipeline development networks in Indonesia and highlighted Indonesia’s specific challenges to promote gas utilization. Following the break, Rudiyanto, President Director of PT.Biro Klasifikasi Indonesia (BKI) delivered a presentation entitled “BKI Role as Classification Society in LNG Supply, Transport & Storage”. Rudiyanto touched on BKI’s experience in supporting offshore businesses and highlighted their experiences with FPSO, FLNG CNG and LNG Carriers. Total E&P Indonesie’s Head of Domestic Sales, Rakhmad Dewanto ended the morning session with a topic entitled “An upstream Perspective on Domestic Gas Utilization”. He explained that the era of cheap gas has ended and new gas supplies are located in frontier regions with higher costs of exploration and exploitation. The prices of natural gas varies because it is not an integrated market for natural gas in Indonesia. With new gas infrastructure expected to materialize, he noted that the involvement of upstream producers in the value chain will help to materialization of the project, coupled with providing reliable supply. Three more presentations took place after lunch, starting with “Updates on Existing LNG Projects Indonesia: A Project Owner’s Perspective. This was presented by Leomirnandi Djohan Karamoy, Corporate Affairs Director at Donggi-Senoro LNG. He highlighted updates on the Donggi Senoro LNG Project; provide insights on keys to successful project execution and Donggi-Senoro LNG s effort for project integration. One of the event’s main sponsors Gaztransport & Technigaz (GTT) presented next on the topic “Taking advantages of membrane for small-scale LNG value chain” This was delivered by GTT’s Business Development Manager, Stéphane Maillard. He highlighted various available technologies on offer with several options to end-users for small and midscale LNG chain. The final presentation of the day was delivered by Tony Regan, Principal Consultant at Tri-Zen International. Tony ended the day with a presentation entitled “Recent LNG Developments & Ten Year Outlook: Update on Developments of

Leomirnandi Djohan Karamoy (DSLNG)

Stéphane Maillard (GTT)

Tony Regan ( TriZen International)

Small/Medium Scale LNG Applications”. The second day began with a presentation by Tammy Meidharma Sumarna, President Director of PT Nusantara Regas. Tammy presented on “Asia’s First FSRU and Its Role in Pushing LNG

Vol. 19 Jul - Sep 2014 NGV Transportation

EVENT & EXHIBITION Developments in Indonesia”. Tammy mentioned that the West Java FSRU Project was categorized as a Fast Track Project based on the Master Plan for the Acceleration and Expansion of Indonesia Economic Development (MP3EI). He also highlighted that

successful operations of the First Indonesian FSRU represents a key milestone for gas infrastructure development as well as the LNG developments for transportation. Another one of the main sponsors, PT Pertamina Gas delivered a presentation on “Arun LNG Receiving Terminal & Arun-Belawan Gas Pipeline : Project Update” This was presented by Hendra Jaya, President Director of PT Pertamina Gas. He mentioned that the Arun Regas and Arun – Belawan Gas Pipeline Projects are critical to maximizing and fulfilling gas demand in Aceh and North Sumatera. The projects are expected start operation in October 2014 although Arun Regasification may on stream in early 2015. The following presenter was Dilo Seno Widagdo, President Director of PT PGAS Solution. Dilo gave an overview and latest happenings with a topic entitled “LNG Integrated System to uphold the Energy Sovereignty in Indonesian Archipelago”. He highlighted the FSRU Lampung project, together with its distribution and infrastructure roadmap. He concluded by mentioning that PPGN will continue to expand the infrastructure and extensively develop gas networks to meet potential gas market throughout Indonesia as well as continuing to progress beyond just their pipeline program, i.e. developing floating regasification (FSRU) in a relatively short period of time. Upon completion of PGN FSRU Lampung, PGN willbe ready to deliver 240 MMscfd more to meet the national gas demand especially in West Java and South Sumatera, where the demand is high, while the supply is discovered far away from the areas. State-owned electricity company PT PLN – represented by its Senior Manager - Energy Planning / Evaluation, Chairani Rachmatullah – presented after the morning break with an important topic entitled “Integrating LNG Infrastructure for Power Generation Utilization”. Chairani highlighted that the implementation of CNG/LNG technology and a feasible solution to replace current Power Plant’s fuel oil consumption. In short term, LNG will still be used as a base loader and to replace oil for all dual fired units. As in the long term, LNG will be assigned as peaking/medium units with supply swing rate (peak/off peak) varying from 40% 100%. This was followed suit by a case study in the Philippines by Raymundo B. Savella, Vice President for Upstream Operations Division of Philippines National Oil Company Exploration Corporation (PNOC EC). Raymundo gave a comprehensive presentation on “Integrating LNG Infrastructure for Power Generation in the Philippines.” Raymundo highlighted that Philippines will be importing natural gas very soon as there is no indigenous replacement for Malampaya Gas. There is a

Tammy Meidharma Sumarna (Nusantara Regas)

Hendra Jaya (Pertamina Gas)

Dilo Seno Widagdo ( PGAS Solution)

Chairani Rachmatullah (PT PLN)

Raymundo B. Savella (PNOC EC)

NGV Transportation Vol. 19 Jul - Sep 2014

EVENT & EXHIBITION strong demand from industrial and power sectors for natural gas and fast tracking development of development of LNG infrastructure is critical for a successful LNG program. The private sector will take the lead while the government does provide incentives and also integrate these projects based on the LNG master plan which is expected to be out by end 2014. The final morning presentation was by Theo Lekatompessy, President Director of PT Humpuss Intermoda Transportasi. As one of the most experienced LNG shippers in Indonesia, Theo focused on the topic “LNG Value Chain: Opportunities in 2014 - 2015”. He gave an overview of LNG shipping transportation and potential growth areas include Small LNG shipping, Offshore Support Vessels and FSRUs. A couple of presentations addressing small scale LNG took place after lunch beginning with a presentation entitled “Small Scale LNG For Remote Areas: Challenges And Opportunities”. This was presented by John Sattar, Consultant - LNG & Natural Gas at Poten & Partners. John discussed the overview of Small Scale LNG and highlighted its advantages, solutions and applicability. Given Indonesia’s geography and the challenging access into remote markets, small scale LNG does have many advantages. A case study from Thailand was presented next, represented by Akkapon Pinkaew, NGV Business & Product Development Division at PTT Public Company Limited. Akkapon delivered an interesting presentation on “LNG Distribution in Thailand via Small Scale Plant: The Value Chain from Plant to Market”. Akkapon talked on the downstream aspects of LNG, notably the Sukhothai Small Scale LNG Plant, with an objective of introducing LNG as an alternative fuel of choice, particularly for the transportation and industry sector. PTT has many pilot projects in transportation and industrial sectors. There are LNG truck tractors, LNG fishery boat, LNG for boat taxis, LNG for rubber factory and LCNG station. Markku Miinala, Director of Deltamarin concluded the conference with a presentation on “LNG Barge And Tugs Outlook”. Markku discussed LNG bunkering technology and the possible role of bunkering barges in LNG logistics. He also gave his toughts on the future outlook for LNG and bunkering barges. Post conference workshops were held on the third day, starting with “LNG 101 – An Introduction to the LNG Business”. The first workshop looked at the LNG business and how it has evolved over the last 50 years and the second one will focus on a new and rapidly emerging LNG sector with the potential to be one of the largest LNG business areas in the next fifty years.

Theo Lekatompessy (PT Humpuss Intermoda Transportasi)

John Sattar (Poten & Partners)

Akkapon Pinkaew (PTT PLC)

Markku Miinala (Deltamarin)

The following workshop entitled “Downstream LNG distribution, LNG as a fuel and the emergence of small/medium scale LNG” provides a comprehensive overview of the LNG business and how it has evolved in the last 50 years. It showed how the technology and infrastructure has evolved by looking at the evolution of LNG liquefaction and receiving terminals. It will provide delegates with a good understanding of the key economic metrics, how LNG is bought and sold and who the key players in the supply chain are. Both workshops are facilitated by Tony Regan, Principal Consultant of Tri-Zen International Pte Ltd. Overall it was a successful event and another related event, Small LNG Shipping and Distribution

Vol. 19 Jul - Sep 2014 NGV Transportation

EVENT & EXHIBITION Tony Regan conducting Workshops

Forum will be taking place on 17-19 September 2014 at the Padma Resort, Bali, Indonesia. LNG supply and infrastructure developments are critical in ensuring the rapid and much needed LNG distribution and integration in Indonesia. The recently operational Lampung FSRU is another serious step taken by stakeholders to ensure LNG infrastructure will continue to be developed. A niche, targeted and sustainable LNG shipping market – notably Small Scale Shipping – has opened up significantly with the availability of LNG Supply and LNG Infrastructures. Small LNG ships will increasingly provide vital functions in terms of regional integration, transportation into remote areas and inter-island crossings. LNG distribution infrastructure via Small Scale LNG vessels are fast becoming a must-have solution for players wanting to effectively deliver natural gas – notably LNG – between Indonesia’s islands. In addition, land-based import terminals are already being seriously planned by state owned companies and private stakeholders – ensuring the growth of Indonesia’s LNG industry remains on progress and on track. This will inevitably increase the utilization and need for Small LNG vessels to be deployed in various regions across the archipelago. Developing LNG for shipping, LNG as fuel and utilizing Small LNG Shipping

NGV Transportation Vol. 19 Jul - Sep 2014

as a distribution tool will change the face of Indonesia’s shipping industry. More Information can be found on www.lng-world.com/lngshipping2014 Looking forward to welcoming you there! NTM

By Rizal Rahman

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Hexagon Lincoln offers products with a proven market record and safe design for reliable operation. We set the standard for excellence — that’s why we’re the global leader in our industry.

Reduce operating costs and emissions. Maximize the benefits of natural gas. Contact us today: 800-279-TANK (8265) • titan@hexagonlincoln.com • www.hexagonlincoln.com

SPECIAL REPORT

Interview with

Jerome Ferrier IGU President

NGV Transportation Vol. 19 Jul - Sep 2014

SPECIAL REPORT emergence of some new prospects for gas development in the region. We hope that the conference in Paris will mark the onset of a new golden era for gas markets in Europe

Jerome Ferrierserre

s WGC Paris 2015 fast approaches, we spoke to Mr. Jerome Ferrier, President of the International Gas Union (IGU) through e-mail correspondence, about the upcoming conference’s objectives and his thoughts on the general future outlook of gas. Mr. Ferrier graduated in petroleum engineering and has more than 30 years of experience in the industry. He has previously been Managing Director of GSO, Director of Total Gas and Power for the Americas, President of Total Gas and Power for the Southern Cone in South America and Group Representative in Argentina, Special Advisor to the President of Total Gas and Power and also Senior VicePresident with effect from 2008. NGV Transportation: What does the IGU hope to achieve with next year’s WGC 2015? Jerome Ferrier: The World Gas Conference is a major event for the whole energy community. It takes place every three years in the country of the President of the IGU. It is the right moment for gas people to exchange on the current situation and state their expectations for the future of natural gas. The two last venues of the WGC were Argentina in 2009, on the eve of the shale gas revolution in the Americas, and Malaysia in 2012, a little before the

NGV Transportation: How would you recommend that authors prepare the abstracts submissions? And how has the response rate been so far? JF: Authors need to meet the expectations of delegates in line with the main theme of WGCPARIS2015: “growing together towards a friendly planet”. It is too early to assess the response rate and consider it as representative of the final result. NGV Transportation: Why is it important for the French committee to get more submissions and involvement from young authors? JF: Youth represent our future and we are organising a specific youth programme for young educated employees or junior professionals in international companies. We would consider it as a positive signal to receive a significant number of submissions demonstrating the interest of the new generation for innovative challenges in the gas industry. We are encouraging international companies to incite young engineers to submit proposals covering all aspects of our business. NGV Transportation: What are some of the current popular trending topics in the industry that are being looked into at the moment? JF: Sustainability is a major issue for political decision-makers, opinion leaders and industrial stakeholders. However, corporate social responsibility is becoming another major topic and any new project to be developed has to include at the onset such essential considerations. NGV Transportation: What are some of the major concerns of developing gas rich nations at the moment?

JF: The major concerns of developing countries are security of supply, cost reductions and energy effectiveness. Natural gas can be the answer to those concerns. It has many advantages in terms of abundance, affordability, accessibility and is also the only fossil fuel acceptable for sustainable development. As a primary energy, gas is definitely the fuel of the future. NGV Transportation: Will the threat of conflict in Russia have strong implications for the future of the gas market in Europe? JF: The question is to assess the impact of the conflict between Russia and the Ukraine on gas supply to European countries. It is obviously in the mutual interest of both sides, suppliers and buyers, to keep gas flowing, according to the strong commitments concluded by all parties concerned for the long term. Thanks to the North Stream pipeline through the Baltic Sea, and soon to the South Stream line through the Black Sea, the Russian flows will be better diversified and this will help reduce the risks of flow interruptions on a specific line. NGV Transportation: Are there any important considerations for countries that have relatively little gas infrastructure when trying to develop their gas industry? Can they still continue to thrive on petroleum and other fossil fuels at the dawn of the Golden Age of Gas? JF: Gas is the cleanest fossil fuel and as such is the best complement to renewable sources of energy, if we are to secure sustainable energy development. So, gas is not only a transition fuel but also a destination fuel and a key asset for a cleaner world energy development. It is fundamental for countries that have relatively little gas to take into account those considerations, and anticipate the necessary infrastructure to be part of the gas development in world markets.

NTM

By Ryan Pasupathy

Vol. 19 Jul - Sep 2014 NGV Transportation

hy is CNG not a major vehicle fuel in Singapore? The question comes to mind when looking at the country which is a fervent supporter of the use of LNG. Is it due to ineffective government policies? Or perhaps there lies some other reason for the fact that there has been a steady decline in the number of NGVs in the country since 2011? Let us take a look at the government policies and how they correlate to the number of NGVs per year and diesel prices. Government NGV Policies Green Vehicle Rebate (GVR) • October 2001 include CNG vehicles

AN ANALYSIS OF NATIONAL POLICIES AND ITS IMPACT ON

NGV GROWTH IN SINGAPORE Carbon Emissions-Based Vehicle Scheme (CEVS) [Effective 2013] Rebates/ Surcharges implemented on vehicles based on Carbon Emissions

• E x t e n d e d 6 t i m e s s i n c e introduction: Jan 2004 - Dec 2005; Jan 2006 - Dec 2007; Jan 2008 - Dec 2009; Jan 2010 - Dec 2011; Jan 2012 - Dec 2012.

Band

Carbon Emission (CO2 g/km)

Rebate/ (Surcharge)

0 -100

$20000

101-120

$15000

121-140

$10000

141-160

$5000

The rebates are as follows: • 40% of the vehicle’s Open Market Value (OMV) for electric, petrolelectric hybrid, CNG and Bi-fuel (CNG/Petrol) passenger cars, • 5% of the vehicle’s OMV for electric, petrol-electric hybrid, CNG and Bi-fuel (CNG/Petrol) buses and commercial vehicles, and • 10% of the vehicle’s OMV for electric motorcycles.

161-210

211 – 230

($5000)

231 - 250

($10000)

251 - 270

($15000)

271 & Above

($20000)

Table 1: CEVS Rebate Chart as per Vehicle Carbon Emissions Band, National Environmental Agency Singapore

Additional Rebates of: • For CNG and Bi-fuel (CNG/ Petrol) vehicles: Special tax exemption for CNG and Bi-fuel (CNG/Petrol) cars until 31 Dec 2011. With effect from 1 January 2012, CNG and Bi-fuel (CNG/ Petrol) cars will no longer be subjected to special tax and a CNG duty was phased in at $0.20 per kg. Bands A1 – A4 are not on par with previous rebates of 40% of

NGV Transportation Vol. 19 Jul - Sep 2014

Figure 1: No. of NGVs in Singapore, Land Transport Authority

revitalize NGV use in Singapore.

Figure 2: Historical CNG Prices in Singapore, SMART Energy Pte Ltd

Fuel Price Data Observation Year

2008

2010

2012

Fuel Price Data Observation Price

1.37 SGD

1.34SGD

1.54 SGD

Fuel Price Data Observation Fuel Type

Diesel

Table 2: Historical Diesel Price Data in Singapore, GIZ International Fuel Price Database

OMV in most instances. (Average OMV based on all available car models in 2012 was $53699). For 2014 OMV and CEVS ratings, they can be found at: http://www.onemotoring.com.sg/ Historical Price Analysis By looking at Figure 1 we can see that there is a visible spike in the number of CNG vehicles in 2008. This spike coincides with the Global Financial Crisis and the record breaking, all time high price of crude oil. These two events would have possibly caused many to believe that the trend was going to continue and that other alternative types of fuel should be considered. CNG prices at the time (June 2008) were much more favourable as compared to diesel. There were no significant policy changes that were made at this time. GVR policy was still in place

and was merely extended to last till the end of that year, following which, was further extended again from 2010. As of Jan 2012 the CNG duty has caused the price of CNG to sky rocket above diesel prices which in turn has resulted in the steady decline of number of CNG vehicles. The price of CNG has remained higher ever since and is now around 1.64$/L while diesel is 1.59$/L. Lack of infrastructure has not been an issue in this instance as the largest CNG station in the world was opened here in 2009. By December 2010 there were 6 CNG stations in Singapore. Most of which have already disappeared. There have since been plans to close off the station and convert it into office space. This could prove to be an issue should there ever be any plans to

A Grim Outlook It can be assumed that should there be no change in the price of diesel relative to CNG, there will probably not be an increase in the number of NGVs. The government could have a hand in turning the tide but at the moment there seems to be little interest in making this happen, especially with the recent fuel excise tax of $0.20 per kg (Current CNG prices are â&#x20AC;&#x201C; $2.15/ kg) placed on CNG together with the reduction of rebates. This tells us a sad tale of the rise and fall of CNG in Singapore. The policies that have been implemented by the government have had little, to no effect on the use of CNG in Singapore. It can be concluded that the policies were just not favourable enough in making the gas a viable alternative to conventional vehicle fuels or that there are other unseen factors detrimentally affecting the policies. Personally, I feel it is the former. The policies that have been implemented were not effective in promoting CNG use. The GVR was a good policy however it was never revised. Replacing it with the CEVS in 2013 though is somewhat puzzling as the change in rebates made it less attractive to use a CNG vehicle as rebates were reduced considerably. To make CNG a real option there would need to be subsidies in place to make CNG cheaper than diesel. The cost of retrofitting a CNG engine brings no cost saving benefit to the user compared to using a diesel engine. If there is no opportunity for possible cost savings, there is really no way that NGVs will ever take off here. The situation now is quite the opposite and with the current direction that the government has decided to go with this issue, it is likely that not a single NGV will remain on Singaporean roads within the next few years. NTM

By Ryan Pasupathy

Vol. 19 Jul - Sep 2014 NGV Transportation

EVENT & EXHIBITION

CHINA SEES STRONG NGV GROWTH IN COMMERCIAL VEHICLES

n the first quarter of 2014, China added over 26,512 new NGV commercial vehicles, representing a 150% increase year-on-year from 2013, where only 17,576 new NGV commercial vehicles were added. Comparatively, the NGV passenger vehicle figures have fallen by 11.2% year-on-year, to 30,488 in the first quarter 2014 from 33,950 in 2013. From CATARC Report The commercial NGV growth was largely driven by the growth of NGV buses. In order to improve the air quality in major cities throughout China, many municipalities and cities are increasingly switching to LNG buses as an alternative fuel that is environmentally cleaner. According to ANGVA, the use of natural gas for commercial fleets should be the way forward as the benefits that can be accrued to the use of these vehicles far exceed the benefits from passenger vehicles.

NGV Transportation Vol. 19 Jul - Sep 2014

The increased capital expenditure arising from the costs of NGVs are better covered by the increased use from commercial vehicles. The environmental gains from using NGVs are also better realized from commercial vehicles as commercial fleet owners are in a better position to ensure that the commercial fleets are well maintained. Poorly maintained NGVs could result in poor combustion, leaking methane into the atmosphere, which is a more potent greenhouse gas. All in all, the growth of commercial fleets utilizing natural gas as a fuel is a good development and we foresee greater growth as commercial operators are increasingly made to abide by environmental emission standards and see the value in making their operations and supply chain greener. The lack of infrastructure hampering operations are also becoming less of a concern as the network of refilling stations grow and the supply of gas becomes

more readily available to all parts of the country. With commercial vehicles picking up steam, LNG will undoubtedly become an ever more important fuel. For commercial vehicles, the key consideration is the range of the vehicle before refueling becomes necessary. LNG is considerably better equipped in this aspect than CNG. Furthermore, the refilling time for LNG is considerably shorter than CNG, giving operators better operational control and less downtime for their fleet of vehicles. However, LNG equipment is more expensive than CNG, requiring the cryogenic treatment of gas and the equipment to handle liquefied gas. In China, where credit is still relatively easy to come by, investments in LNG infrastructure and equipment would be recoverable relatively quickly, especially since the cost of using natural gas is cheaper than petroleum and diesel. The future of the worldâ&#x20AC;&#x2122;s logistics and public transportation network lies in the largescale deployment of LNG for commercial vehicles. Already, China is leading the world in LNG for vehicle use and it is well-poised to take advantage of the coming evolution. NGV Transportation Magazine is organizing a study tour to China visiting key government officials, companies and infrastructure that is driving the future of commercial transportation today in October 2015. This unique tour will highlight key aspects for growth, showcase valuable case studies and bring you to equipment manufacturers leading the pack! For more information, please contact NGV Transportation Magazine at info@naturalgasglobal.com NTM

By Vincent Choy

NGV

TRANSPORTATION MAGAZINE

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Vol. 19 Jul - Sep 2014 NGV Transportation