India Prepares Kolkata and NW-1 for LNG-fueled Barges

India Prepares Kolkata and NW-1 for LNG-fueled Barges

Kolkata, the capital of India’s West Bengal state, is preparing the way for Liquefied Natural Gas (LNG) to fuel barges transporting freight on National Waterways No. 1 (NW-1). The Haldia Dock Complex, located south of Kolkata and managed by Kolkata Port Trust, has recently earmarked about 10 acres of land for LNG storage facilities.

The project will be undertaken on a land lease model by granting a 30-year lease of land by middle of December, 2016. LNG facilities are expected to be developed within 24 months from date of allotment of land.

The Ministry of Shipping describes the project as an important development within the context of its recent efforts to reduce logistics cost and achieve the COP21 targets on cutting down pollution by introducing the use of LNG as fuel for barges. Use of LNG is expected to save around 20 percent on fuel costs. Carbon Dioxide emissions are likely to get reduced by 20-25 percent and nitrogen/sulphur oxide emissions by 90 per cent.

The government is therefore taking measures to facilitate the movement of LNG and its storage at places situated along the inland waterways. Only a few advanced countries are using LNG powered barges at present. Therefore in that sense, the development at Haldia Dock Complex can be seen as a very positive one.

India has been increasing emphasis on transport via inland waterways and coastal shipping over the past two years, seeing Inland Water Transport (IWT) as a cost effective and environment friendly system. Several projects are underway to facilitate this transition.

The Ministry of Shipping has been regularly holding discussions with Petronet LNG Ltd. (PLL) and Inland Waterways Authority of India (IWAI). PLL is in the process of preparing a Detailed Feasibility Report for setting up LNG facilities at Haldia, Sahibganj, Patna and Ghazipur on NW-I (Ganga) as per anMoU signed by them with IWAI during the Maritime India Summit in Mumbai in April this year. PLL and IWAI are working together to estimate the likely demand for LNG fuel.

The construction of LNG barges at Indian shipyards would be entitled to the 20 per cent subsidy through the ship building subsidy scheme whose guidelines have already been released by the Shipping Ministry.

PLL was also requested to list in detail the infrastructure support needed for moving to LNG as fuel for barges including identification of milestones on the path to achieve this. The LNG storage hubs may be built along the river Ganga. Readily available natural gas fuel supply is seen as having potential to broaden the customer base beyond shipping in the hinterland, replacing LPG, Naphtha, and HFO fuel for industry and the road transport sector.

Goa and Maharashtra also have potential for introduction of LNG barges on their waterways. PLL was requested to explore the introduction of LNG barges for that region, and discussion has led to other areas also being considered.

India has nearly 14,500 kms of navigable and potentially navigable inland waterways – which include a network of rivers, lakes and canals. The Inland Waterways Authority of India (IWAI), an apex body for development and regulation of inland waterways for shipping and navigation has identified ten waterways for initial consideration for development out of which three have thus far been declared as National Waterways.

The NW-1 stretches more than 1,620 kms: starting at the Bay of Bengal, the Ganga-Bhagirathi-Hooghly River System reaches north from Haldia-Kolkata (West Bengal) to Farakka, then west through Munger – Patna – Varanasi to Allahabad in Uttar Pradesh.

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