A Conference Review by Keith Hall
A Regional Supply Chain
Shaunt Hartounian, Vice President of Business Development and Strategic Relations at Applied Natural Gas Fuels Inc. (ANGF) (altlng.com), presented “Successful Development of LNG Supply Chain: A Case for Regionalism.” ANGF is the second largest producer of LNG for transportation and industrial use in the United States. From its liquefaction plant in Topock, AZ, ANGF produces up to 30 million gallons of LNG per year. A second liquefier at that site, slated to come on line in mid-2014, will double ANGF’s production capacity.
Current US LNG supply is dwarfed by diesel consumption. Today, LNG fuel supply for the transportation sector for the entire US is 853,000 gallons per day. This corresponds to 501,000 diesel gallons equivalent (DGE) (1.7 gallons of LNG has the same BTU energy content as one gallon of diesel), which represents less than two percent of the current US HD Class 8 truck market. To replace 100 percent of the diesel fuel used by Class 8 trucks, the US would have to increase its current LNG fuel supply for transportation by sixty-fold.
The driving force behind the push to LNG as a transportation fuel is its significant cost savings compared to diesel. There are other benefits as well, such as a significantly reduced carbon footprint compared to diesel and a reduction of dependence on foreign oil.
In his presentation, Hartounian focused on the need to tackle the fuel supply and distribution issue on a regional basis, rather than a national one. Hartounian noted that an effective supply and demand radius around an LNG liquefaction plant should not exceed 400 miles. When it comes to distribution, maximizing LNG transport trailer utilization is vital. The longer the delivery route, the more trailers are required to deliver the same amount of fuel, which increases the delivered price for the end users.
Hartounian also stressed the need for dependability of supply. Reliability in the industry requires a mix of a network of production facilities combined with a robust operations and logistic services. A balanced approach to supply is also required. Suppliers tread a fine line between too much and too little, too late. Solutions (i.e. production, equipment, etc.) must be accessible and deployed in manner that supports a mature market. Finally, the need for fueling infra- structure must match the needs of the end users in terms of location, fuel quality, dispensing pressure, etc.
*Excerpt from original story published July 2013 — CryoGas International