Ashok Leyland fuels LNG boom in trucks, eyes tie-ups with city gas giants

Commercial vehicle major Ashok Leyland is in talks with leading city gas distribution companies to ensure the availability of liquefied natural gas (LNG) in their compressed natural gas (CNG) retail outlets, according to a top company executive.

 

The plan is being floated as the Petroleum and Natural Gas Regulatory Board (PNGRB) is expecting a multi-fold jump in the number of LNG trucks from 700 at present to 500,000 by 2040. “Original equipment manufacturers and customers are talking about the availability of fuel stations. We find that many city gas distribution (CGD) companies are getting into selling both CNG and LNG in the same fuel station. We are in talks with Adani, AG&P Pratham, Think Gas, and Mahanagar Gas to ensure the availability of LNG once the market evolves,” Sanjeev Kumar, president, MHCV business of Ashok Leyland, told Business Standard.

 

At present, India is in the process of expanding the LNG infrastructure through setting up stations along major highways and the Golden Quadrilateral. “The penetration of LNG is very slow now. There is a definite advantage in terms of total cost of ownership (TCO) of a vehicle when it comes to LNG over diesel. This is a new concept where a fuel pump can provide both CNG as well as LNG. The chemical formula is the same; the only question is about how you store the gas. We feel that at some point of time, it will start picking up,” Kumar added.

 

According to the plan, CGD firms will enter into a tripartite deal with OEMs, along with prospective customers and fleet owners. “They are looking for some tripartite agreement, where they are sure about the supply of vehicles by OEMs, and some sense coming from their customers in terms of putting up vehicles,” he said. At present, companies like Tata Motors, Ashok Leyland, and Blue Energy Motors are mainly offering LNG-powered trucks.

 

Kumar also batted for complete LNG corridors to be in place for the segment to pick up. “We have seen major developments happening in the West, and some in the South also. Unless one complete corridor is in place, it will be difficult for operators also,” he added. The company is looking at all options of alternate fuels now.

 

According to a demand assessment study conducted by the PNGRB, India is expected to see a rise in LNG trucks in the next 15 years as the fuel offers to reduce user consumption and cut carbon emissions in the freight sector. The study says that LNG trucks in India may increase from around 700 trucks in FY24 to nearly 200,000 by 2040 in a Good-to-Go (GtG) scenario and to 500,000 in a high-growth Good-to-Best (GtB) scenario. Interestingly, China already has a network of around 800,000 trucks and 6,000 refuelling stations.