NEW DELHI : The Indian Railways has allowed the transport of liquefied natural gas (LNG) through its network, enabling cheaper delivery of the fuel to areas that lack pipelines. While this initiative will allow the ports to attract more gas shipments, it will also ensure delivery of the fuel at low costs to areas that do not have pipelines. Currently, the delivery of LNG is done by trucks. “Now, the entire country opens up as a market for a company that has an LNG terminal with a railway siding,” said Ashish Agarwal, managing director of Seros Shipping & Logistics, which operates India’s largest virtual pipeline network for LNG and compressed natural gas (CNG).
The move will boost ports that already have both natural gas regasification terminals and rail connectivity, allowing them to attract more gas shipments.
LNG transport through rails
Further, the transport of LNG through the rails will allow LNG import terminals in Gujarat and southern India to tap the entire domestic market.“Assuming that LNG prices were at a year ago levels, this development would result in at least 1.00-1.50 million tonnes of LNG moving by rail,” Agarwal told Economic Times. Gas-based power plants in northern India could become viable once fuel prices fall and logistics costs decline through rail delivery, he noted.Over 40 per cent geographical areas that have been bid out in the recent City Gas Distribution (CGD) bid rounds, which do not have pipeline connectivity, can be connected with the rail network, accoding to analysts.The move will also bring down the cost significantly. “If one were to take a round trip distance of 500 kilometres from a Regasified Liquefied Natural Gas (RLNG) terminal, then transportation by rail would be cheaper by at least 30 per cent,” explained Sanjay Sah, partner at Deloitte. This enables new options to reach geographical clusters that were not serviceable from RLNG terminals due to commercial constraints.
Roll on-Roll off service
The Centre looked into many plans including a Roll on-Roll off service for rail transportation of LNG, according to officials. The service entailed the use of trucks which would be driven on to rakes and then transported on the railway network. The trucks would then drive to their final destinations after the train arrives at the destination.This mechanism was used to transport liquid oxygen in cryogenic tankers during the Covid-19 pandemic. However, this method could not take off for LNG due to safety, feasibility and operational issues.