Welcome to pipelines on wheels as LNG giant turns to trucks

The country’s top suppliers are loading liquefied natural gas onto tanker trucks and delivering it to users to make up for insufficient pipeline coverage inland. The method is so effective ENN Group is using it as a primary way to move LNG from its new terminal.

Gas is in such hot demand in China right now it’s allowing a quirky market to flourish: transporting the fuel on trucks. The method is so effective ENN Group is using it as a primary way to move LNG from its new terminal. The distributor’s new terminal in Zhoushan, a tiny island at the mouth of the Yangtze River, is the first in the world built to load the majority of its imports onto trucks instead of reheating them to their gaseous state for pipelines or power plants.

Heckmann Water Resources Inc will be running more liquefied natural gas-fueled tractors than any other tank truck fleet in North America. Just as significantly, it will be using those tractors in one of the most demanding operating environments: The oilfield. Companies like ENN are happy to take this pricier route because it can be more lucrative. Trucked LNG sells for about 4,500 yuan ($650) a ton.

The nation has taken steps toward a free market by auctioning off gas and import terminal space on exchanges, granting third parties access to assets operated mainly by state-owned giants, and revising its pricing mechanism. The 200 LNG-fueled Peterbilt Model 367 and Model 388 tractors that will be delivered to Heckmann in coming months will be used to haul water for oil and gas drilling operations in the Haynesville shale region that covers a large area of northwestern Louisiana and East Texas. This is going to be a real test for the Westport GX engine, which is built on the Cummins ISX 15-liter platform and uses Westport’s high-pressure direct-injection technology that runs on a mixture of 95% natural gas and 5% diesel.

“We are dedicated to using equipment that helps develop the market for our customers’ product, lowers our carbon footprint, and provides significant cost savings and optimal performance,” says Richard J Heckmann, chairmanand chief executive officer of Heckmann Corp. “We are proud to be the firstoil and natural gas services provider to offer LNG trucks to our clients and to operate the largest fleet of LNG trucks in North America.

We encourage other companies to participate in these affordable, environmentally friendly opportunities as well.” The oilfield service company’s commitment to natural gas as a heavy-duty truck fuel was recognized with the 2011 NGV Achievement Award from the Clean Vehicle Education Foundation and Natural Gas Vehicles for America (NGVAmerica). The award was presented during the 19th Annual Natural Gas Vehicle Summit held October 20-22 in Fort Worth, Texas.

“Heckmann has emerged as a true leader for the natural gas industry,”

Says Richard Kolodziej, president of NGV America.

“Earlier this year, the company placed the single largest order of LNG-powered vehicles in the United States, and we are delighted to recognize such a strong advocate for the natural gas industry.”

The first three production trucks in the order were delivered in October, and were put to work immediately. The oilfield hauler will have 59 LNG-fueled trucks in service by the end of this year, and deliveries will be complete by the end of May 2012. The new tractors will replace most of Heckmann’s fleet of approximately 200 diesel-fueled tractors that are currently running in the Haynesville shale region.

Also part of the fleet are roughly 200 vacuum trailers. “We believe these new LNG-fueled tractors will be ideal for the oilfield,” says Brett Quigley, Heckmann Water Resources fleet director. “We’re confident that LNG is the fuel of the future for trucking. As more companies embrace the conversion to LNG, the infrastructure for that fuel will grow. Ultimately, that will reduce our dependence on foreign oil and create more domestic jobs.

“We derive the bulk of our revenues from the producers of natural gas in this country. It just makes sense that we would do everything possible to: (a) use the product they produce; (b) be able to pass along to them the very significant environmental advantages of burning a much cleaner fuel while performing the functions needed to help them produce that fuel; (c) be able to pass along to them the significant reduction in fuel costs, thereby reducing the costs to the ultimate customer of their product; and (d) by converting our large fleet to LNG, we are setting a competitive standard that should drive other fleet conversions, creating even more demand for natural gas.

This is definitely a customer-driven effort.” In addition to the Haynesville shale formation, Heckmann Water Resources supports oil and natural gas drilling operations in the Eagle Ford shale and Barnett shale areas (both in Texas) and in the Marcellus and Utica shale formations that underlie a large part of the US northeast.

Parent company Heckmann Corp focuses on total water solutions for shale or “unconventional” oil and gas exploration and production operations. Heckmann Water Resources provides a range of services that include fresh water supply; water transport, treatment, and disposal; well testing; pipeline transport facilities; and water infrastructure.

China’s unprecedented crackdown on its noxious smog by replacing coal furnaces with gas burners has become one of the most important factors shaping the global energy market. “Trucked LNG is helping set the stage for further price deregulation,” Wang said. “As this slice of market grows, more and more users are exposed to market prices instead of regulated prices.”

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