BOC Begins Construction of Australia's First Micro-LNG Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--BOC (Sydney, Australia), a part of Linde AG (OTC:LNAGY) (Munich, Germany), has commenced construction activities of Australia's first micro liquefied natural gas (LNG) facility in Westbury in the island state of Tasmania. LNG output from the plant will be supplied to the transportation sector. BOC will invest $126 million in the region to construct and operate the micro-LNG plant and supply six refueling stations to LNG Refuellers Pty Limited, a consortium of seven transport operators in Tasmania.

The micro-LNG plant will have a production capacity of 50 tons per day, equivalent to 70,000 liters of conventional diesel. The facility will procure natural gas from the Tasmania gas pipeline through a 25-30 meter off-take link. Subsequent to processing, LNG will be stored at the facility until it can be transported for distribution statewide. The plant is scheduled to begin full-capacity operations by July 2010. The project will generate 30-40 employment opportunities during the construction phase.

In July, BOC awarded a contract to engineering and consulting services provider GLP Group (Melbourne, Australia) to undertake design and construction of the entire supply-chain infrastructure from pipeline to truck, including the development of LNG road tankers. The micro-LNG facility is also being designed to allow for future expansion to a capacity of 100 tons per day, subject to early indications of a positive growth in demand.

In September 2008, LNG Refuellers and BOC entered into an agreement to supply LNG to more than 120 heavy vehicles in Tasmania. The two firms had been in talks about the project since 2005. Under the agreement, the two firms established a new refueling company that will own and operate a network of six commercial LNG refueling stations across the state and address the fuel requirements of most fleets on major freight routes in the state. The project also secured a grant of $4.25 million from the Tasmanian Community Forest Agreement Industry Development Program, a joint initiative of the state government of Tasmania and the Australian federal government. The consortium, LNG Refuellers, consists of Aprin Transport, Chas Kelly Transport, Country Roadways Pty Limited, Exeter Sawmill, Kevin Morgan Pty Limited, KJ Padgett Pty Limited and Les Walkden Enterprises, all Tasmania-based transport operators.

Natural-gas-powered heavy vehicles emit up to 25% less greenhouse gases than diesel-powered trucks. With additional benefits such as reduction in engine noise and maintenance costs, the use of LNG to power heavy vehicles will provide long-term economic benefits to transport operators.

BOC intends to set up similar micro-LNG projects nationwide under a five-year retail plan. According to reports published in May this year, the firm was in talks with the South West Sustainability Partnership (SWSP) (Victoria, Australia), a 15-member incorporated body working toward regional sustainability, and regional transport companies to implement a similar project in the state of Victoria. According to the SWSP, the project will require a land area of 140 meters by 110 meters. Although no specific site has been identified for setting up the facility, it will probably be established near existing natural-gas plants at Port Campbell, along the route of the SEA gas pipeline in the state. BOC hopes to set up micro-LNG plants in New South Wales and Queensland.

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