Shell India is aiming to significantly contribute to developing a green transport ecosystem in the country by replacing diesel with liquefied natural gas (LNG). In addition to its traditional focus on LNG, the company is considering entering the compressed biogas market as part of its strategy to expand its presence in India's clean energy sector. According to Nakul Raheja, the country head of Shell Energy India, the recent decrease in LNG prices has sparked increased interest among stakeholders to expand the network of LNG suppliers for transportation.
“We are very excited by the opportunities emerging in the gas market in the next few years. We were one of the early movers in the gas market by taking up a position in Hazira (Gujarat) and setting up the Hazira LNG terminal nearly 20 years ago now. Three-and-a-half years ago we added a truck loading unit at Hazira which allows us to send out LNG which serves not only industrial customers but feeds into the network which is coming up for LNG as a transport fuel," Raheja said.
He observed that in recent months, there has been growing interest from all parts of the ecosystem, including investors, LNG stations, OEMs manufacturing LNG-fueled vehicles, retrofitters converting diesel trucks to LNG, LNG suppliers, and the government. "A big driver for this is that the LNG prices are now back in the range where they make sense for the customer. There is a lot of energy being put into this space. More and more sites are getting commissioned which can dispense LNG", he said.
Currently, spot Asian prices for LNG range between $10-12 per mmBtu (million metric British thermal units), down from approximately $18-19 per mmBtu a year ago. To broaden its portfolio within India's gas ecosystem, Shell is also exploring the compressed biogas (CBG) market.
"We are also tracking developments in the compressed biogas space or renewable natural gas to see how we can add that to our portfolio as well and have our gas customers look to further decarbonize their gas supply chain how could we introduce CBG as part of that. A lot of our customers are switching to gas as it makes both economic sense and helps reduce their carbon footprint. As they go forward they make look for solutions which may help in further reduction in their carbon footprint and CBG plays a role in that space", he said.
CBG is produced from sources such as agricultural residue, cattle dung, solid waste, sewage treatment, and other waste or biomass. It is similar to compressed natural gas (CNG) and can be used as an eco-friendly fuel in industries and automobiles. Interest in CBG is rapidly growing, especially as the government has mandated its blending with CNG and piped natural gas (PNG) starting in FY26.