India’s biggest natural gas importer is going to some of the most isolated parts of the nation to fight the pollution choking its cities. Petronet LNG Ltd. plans to build small plants that will liquefy natural gas from fields with little access to pipeline infrastructure, and then sell it to trucks and buses, chief executive officer Prabhat Singh said in an interview. Besides being cleaner, the fuel can be as much as 30% cheaper than diesel to power transportation, he said.
More than 70% of India’s vehicles run on diesel, which is seen as a key source of vehicular emissions in a country that’s home to 14 of the world’s 30 most-polluted cities. Tapping isolated gas fields will also help bring deposits to the market and aid Prime Minister Narendra Modi’s drive to cut the nation’s import bill. Economic rival China is currently driving growth in small-scale liquefaction plants as Xi Jinping’s administration has vowed to combat pollution.
“We want to create demand that’s pipeline agnostic,” Singh said. “If you can do that, then as an LNG player we are happy because we are not dependent on pipeline. And laying pipeline anywhere is so problematic.” The company is already in talks with Focus Energy Ltd., which has natural gas discoveries in the deserts of the north Indian state of Rajasthan. The fuel from those fields don’t currently have an outlet because of the lack of pipelines. The global small-scale LNG market is projected to double to about $52 billion by 2026, a report by Research and Markets shows.
In China, about 60% of LNG for the transport industry is sourced from domestic liquefaction units, and the rest comes via imports, according to a February research report from UBS Group AG.