Indian Railways News: Indian Railways allows LNG transportation | So Good News

Indian Railways has allowed the transportation of liquefied natural gas (LNG) through its network, enabling cheaper delivery of the fuel to areas lacking pipelines.

The move will boost ports that already have both natural gas regasification terminals and rail connections so they can attract more gas shipments.

From now on, trucks are used to transport gas to users who are not connected to any pipelines. Sector watchers say the railways could take a large share away from the roads given that rail transport is more economical over long distances.

“Now the whole country is opening up as a market for a company that has a rail-track LNG terminal,” said Ashish Agarwal, CEO of Seros Shipping & Logistics, which operates India’s largest virtual LNG and compressed natural gas (CNG) pipeline network.

The rail access will allow LNG import terminals in Gujarat and South India to tap the entire domestic market.

“Assuming LNG prices were at the level of a year ago, this development will result in at least 1.00-1.50 million tonnes of LNG being moved by rail,” Agarwal said, adding that gas-fired power plants in north India could be viable when fuel prices fall and logistics costs drop through rail delivery.

Analysts estimate that more than 40% of geographies that have been tendered in recent bid rounds for City Gas Distribution (CGD) do not have pipeline connectivity.

These can be served through the rail network.

“If one were to take a round trip distance of 500 kilometers from a Regasified Liquefied Natural Gas (RLNG) terminal, transportation by rail would be cheaper by at least 30%,” said Sanjay Sah, partner at Deloitte. This enables new opportunities to reach geographic clusters that could not be served from RLNG terminals due to commercial constraints.

Officials say several plans were examined by the Centre, including a Roll on-Roll off service for rail transport of LNG. In this service, trucks are driven on rakes and then transported on the rail network. When the train reaches its destination, the trucks are driven to their final destinations.

This mechanism was used to transport liquid oxygen in cryogenic tankers during the COVID19 pandemic. But this option could not take off for LNG due to safety, feasibility and operational issues.

It is believed that with the approval of the use of ISO tanks for LNG transport, many problems have been solved since these tanks can be handled as containerized cargo.