WESFARMERS entity Kleenheat Gas has signed an agreement with GasNet to design, procure, build, commission and operate a Liquefied Natural Gas truck loading facility in Melbourne.
The facility will be at GasNet’s 12,000 tonne LNG storage operation that is actually an emergency LNG storage facility for the Melbourne gas network.
It will have the initial capacity to supply the total fuel requirement of more than 200 heavy duty vehicles. Kleenheat has a long-term supply contract with a major Victorian fleet operator of line haul B double vehicles. That customer has more than 100 vehicles that will consume LNG.
Kleenheat managing director Gary Ireson said the deal would not result in a huge revenue jump for Kleenheat and its parent company Wesfarmers but was a stepping stone into a potentially lucrative market.
"The entire market for autogas is about 1.1 million tonnes per year," he said.
"That represents about 7 per cent or 8 per cent of the transport fuel market in Australia.
"It wouldn’t be inconceivable that we’d be able to get 2 per cent of the diesel market."
Kleenheat is now concentrating on making LNG an alternative to diesel and compressed natural gas for the heavy vehicle sector.
To keep the gas levels at the storage facility up Kleenheat has entered into a gas supply agreement with AGL.
BOC is also another partner to the deal that has been nearly two years in the making.
GasNet is a regulated gas trans-mission provider with assets predominantly situated in Victoria as well as connecting with New South Wales.
Almost all the natural gas consumed in Victoria is transported through GasNet’s 1,930 kilometre high-pressure gas transmission pipeline network.
Kleenheat is one of the largest players in Australia’s autogas market.
In Western Australia it operates under its own banner, while on the east coast it operates under the name of Unigas through its partnership with Elgas.
The company supplies about 1,000 sites out of the 3,400 sites in Australia.
Mr Ireson said the company mainly supplied independent fuel retailers with autogas.
Mr Ireson said the company had tried to make the truck refuelling process as similar to diesel as possible to try and speed up market acceptance of LNG.
In WA Kleenheat also has a LNG plant at Kwinana that is capable of producing three tonnes of the product a day.
Mr Ireson said that was pilot plant.
"What we’re able to do with that is incrementally increase the size of the plant," he said.
"We can step up to six tonnes and probably up to nine tonnes as the market grows."
The Kleenheat LNG plant is located near the Wesfarmers LPG operation.
LPG is made up of a combination of butane and propane. LNG is predominantly methane.
The gas is cooled to make a liquid that is pumped into the tanks of the vehicle.
The liquid fuel is run through vaporisers and converted to gas that the engine then burns.
“It wouldn’t be inconceivable that we’d be able to get 2 per cent of the diesel market.”
