Trucking LNG through Tasmania

In March 2006, a group of forest industry transport operators approached the Launceston office of the Tasmanian Department of Economic Development,seeking advice on using natural gas for heavy vehicles.

The idea behind using natural gas to fuel their trucks was to provide them with some security against rising diesel prices.

Over the next few months, an alternative fuels consultancy had assessed the feasibility of using natural gas for heavy vehicle operation and a project concept was formalised, with an application made to the Commonwealth Government for funding assistance under the Tasmanian Forest Industry Development Program.

Tasmanian forestry trucks complete the highest number of miles on average and carry the heaviest loads of any trucks in Tasmania, resulting in heavy fuel use and emissions. There are 1,500 prime movers in Tasmania, all of which cover 200,000 km per year as opposed to delivery or refrigerated trucks that cover 50–60,000 km per year.

By September 2006, the group of transport operators had registered a new company — LNG Refuellers — establishing the first commercial pipeline-to-truck supply of LNG for heavy vehicle transport in Australia.

The consortium is comprised of:

• KJ Padgett and Co;
• Chas Kelly Transport;
• Kevin Morgan;
• Aprin Transport;
• Exeter Sawmill;
• Les Walkden Enterprises; and,
• Country Roadways.

LNG Refuellers Chief Executive Officer Alvaro Ascui says that using LNG as an alternative to other fuels has a number of benefits.

Mr Ascui explains that natural gas vehicles typically deliver lower greenhouse gases than conventional vehicles, with the more sophisticated gas engines able to deliver emissions savings of up to 20 per cent.

The Westport GX engine is the only engine that is able to generate carbon credits that are tradeable under the voluntary trading scheme. Nineteen of these trucks exist in Tasmania today.

Despite the lower energy content of LNG when compared to diesel (1.65 litres of LNG is required to substitute 1 litre of diesel), the lower price of LNG means it delivers annual fuel savings of approximately 30 per cent.

Another major benefit for micro-LNG users is that it reduces noise pollution, as engines run quietly.

The price of natural gas in Australia is largely regulated by the Australian Energy Market Operator and the Economic Regulation Authority in WA, and has been historically stable relative to volatile diesel prices.

In mid-August 2008, a deal was finalised between LNG Refuellers and BOC for the supply of LNG fuel for over 120 natural gas vehicles. This was achieved through the construction and operation of Australia’s first micro-LNG plant at Westbury, Tasmania, as well as the supply of five refuelling stations, which are located at Westbury, Launceston, Burnie, Scottsdale, and Bridgewater.

Mr Ascui says that greater investment in re-fuelling infrastructure will see the use of LNG as a transport fuel rise.

Ensuring security of energy supply with LNG

BOC began producing LNG at its CryoCentre in Dandenong over 50 years ago, and continues be a leader in developing new economical low emissions fuel alternative technology for the trucking and other sectors.

It officially opened its first micro-LNG plant at Westbury in February 2011. The plant has the capacity to produce 50 tonnes per day (t/d) of LNG – the equivalent of 70,000 litres of conventional diesel.

The Westbury plant is seen as a forerunner to similar technology the company hopes to roll out on the mainland in a long-term commitment to supporting the domestic gas industry and reducing greenhouse emissions.

Other significant LNG projects being undertaken by BOC include an extension to its Victorian CryoCentre and the intention to supply micro-LNG to industry in Queensland’s Surat Basin, through a contract with Australian CSG explorer and producer QGC.

The company is also working to develop ‘an LNG highway’ to refuel transport fleets along the east coast of Australia. The planned LNG fleet refuelling network will include transport company depot refuellers located at the transport company yard, and public refuellers located at selected truck-focused service stations and roadhouses around Australia.

Alongside these heavy vehicle fleet fuelling activities, BOC will also focus on marine, locomotive and mining vehicle refuelling applications. BOC Strategic Marketing Director Bruce Currie says that because LNG is a locally-produced, Australian ‘indigenous fuel’, it is therefore not exposed to international crude oil prices, or lack of availability caused by European demand cycles or fluctuations in the Australian dollar relative to other currencies. As a result, BOC – and its subsidiary company ELGAS – is able to give customers a higher degree of operating cost certainty, compared to imported LPG or diesel.

However, distributing LNG has a large operating cost associated with it.

“Micro-LNG would be beneficial for companies with existing access to natural gas or who are positioned close to an area where a plant can be placed, as this would ensure a reliable and secure supply of energy,” says Mr Currie.

With regard to the future of micro-LNG, Mr Currie says “As the world grows more and more environmentally aware, LNG — the cleanest burning fossil fuel available — will play an increasingly important role in delivering an economical low-emissions fuel alternative.”

Exploring the potential of LNG

Wesfarmers’ Kleenheat Gas, through its brand EVOL LNG, is also exploring the vast potential of LNG for the domestic market. EVOL LNG currently supplies LNG and supporting refuelling facilities to more than 200 trucks in WA and Victoria, with plans to expand into New South Wales, Queensland and South Australia.

Kleenheat Business Manager – LNG Nick Rea says that the company has spent many years testing and developing LNG as a cleaner and more economical energy alternative to diesel for a range of industry applications.

“Various engine systems were trialled and developed in co-operation with the Commonwealth Government and the engine manufacturers over a period of a few years,” says Mr Rea.

When asked why LNG’s properties are well suited to being used as a domestic fuel, Mr Rea explains, “Firstly, LNG has the lowest carbon content of all fossil fuels with the potential to really reduce a user’s carbon footprint. As a cryogenic liquid, LNG vaporises very quickly into natural gas if ever it comes into contact with ambient air.

Natural gas is lighter than air so it dissipates rather than accumulating in drains and pits as can happen with LPG. It also has the highest auto ignition temperature of all the hydrocarbon fuels, making it inherently safer as well.”

Mr Rea says that the possibilities for micro-LNG to be used in the heavy vehicle and industrial markets are very real and very exciting, and added that micro-LNG can be used for remote power generation as well.

“LNG is trucked to site by cryogenic tankers and stored in large vacuum-insulated tanks which provide a few days of supply,” Mr Rea explains. “The LNG is returned to gas using ambient air vaporisers and supplied to the power station as natural gas.”

In 2008, Kleenheat invested in the construction of an $A140 million integrated project in WA that included a 175 t/d LNG plant at Kwinana, south of Perth. In addition, the company supplies two LNG-fuelled power stations and a growing network of LNG refuelling facilities around the country.

Kleenheat integrated gas processing for the new LNG plant with the existing liquid petroleum gas (LPG) extraction plant established in 1988 at Kwinana.

“The capital and operating costs of the new LNG facility were significantly reduced by leveraging off the existing facilities in the LPG plant,” says Mr Rea. “This included control room, hot oil, low LPG feed gas, gas pipeline connections, utilities – including flare, air, nitrogen, water and refrigerant.”

Mr Rea points to the US as an example of how micro-LNG has been embraced as a transport fuel: “Take the Chesapeake Energy Corporation, for example, which announced in July 2011 that it will invest $US150 million in 150 truck refuelling stations across the US.”

This interest is reflected locally by the thousands of natural gas buses operating in Australia’s public transport fleets – Sydney, Brisbane, Adelaide, Perth and Canberra in particular.

“Testing of an ADR80/03 15-Litre 550 HP Westport gas engine showed it produced 25–30 per cent less greenhouse gas emissions than the equivalent diesel engine,” says Mr Rea. “This engine is available factory-fitted by Kenworth. There are several aftermarket conversions available today, although numerous other original equipment manufacturers are investigating their own LNG-powered trucks.”

EVOL LNG will soon be distributing American Power Group’s (APG’s) new aftermarket dual-fuel conversion for heavy-duty vehicles, having recently entered into an exclusive agreement with APG.

While the micro-LNG industry is certainly attracting interest, Mr Rea says its further development will not be without its challenges. “There are many challenges from the production and distribution of LNG right through to the marketing and conversion of customers,” says Mr Rea. “The challenge is to understand these issues and allow for them all. It has taken EVOL LNG many years of trial and error to accumulate its knowledge.”