Liquefied natural gas (LNG) Refuellers, a consortium comprising seven Tasmanian transport operators, has entered into an agreement with industrial gas company BOC, for the supply of LNG fuel for over 120 natural gas–powered heavy vehicles in Tasmania.

LNG Refuellers chairman Ken Padgett said “This project will result in the establishment of the first commercial pipeline-to-truck supply for heavy vehicle transport in Australia.

“We have formed a new refuelling company that will own and operate a network of six commercial LNG refuelling stations across Tasmania to manage the fuel logistics needs of most Tasmanian fleets on the major freight routes,” said Mr Padgett.

“This deal represents a $150 million vote of confidence in the commercial merits of natural gas as an alternative to wholesale use of diesel fuel.”

BOC will build and operate a new micro-LNG plant near Westbury, which will include an off-take pipeline from the Tasmania Gas Pipeline (TGP). The company will also design and construct the supply chain infrastructure for LNG Refuellers, including LNG road tankers and six refuelling stations.

BOC General Manager of LNG Alex Dronoff said “The LNG plant will have the capacity to produce 50 terajoules per day. That is the equivalent of 70,000 litres of conventional diesel.

“This alternate fuel is cleaner, which is a win for our customers and the environment. We look forward to working with LNG Refuellers to deliver clean and efficient fuel for the Tasmanian heavy transport sector,” said Mr Dronoff.

BOC said that LNG releases up to 25 per cent less greenhouse gases than diesel powered trucks and unlike oil, the plentiful supply of natural gas in Australia helps maintain a stable price making it an ideal fuel for heavy transport.

“With rising fuel prices and the long term security of oil supplies under question we began looking for alternate fuels. Our investigation led us to the conclusion that natural gas provides an effective overall solution from a commercial, economic and environmental perspective,” said Mr Padgett.

The LNG network represents the culmination of more than two years of work on behalf of the Tasmanian transport operators, the Tasmanian Department of Economic Development and experts in financial management and alternative fuels.

“This project would not have been possible without the hard work of the LNG Refuellers shareholders, the provision of resources by the Tasmanian Department of Economic Development and Tourism, and a $5 million grant provided through the Tasmanian Community Forest Agreement Industry Development Program, a joint Australian and Tasmanian government initiative.” Mr Padgett concluded.

LNG Refuellers comprises seven Tasmanian transport operators including: Chas Kelly Transport, KJ Padgett, Aprin Transport, Les Walkden Enterprises, Exeter Sawmill, Country Roadways and Kevin Morgan.

Meanwhile, the Tasmanian Resource Planning and Development Commission has approved the rezoning of 127 hectares of rural land to allow for a new industrial subdivision at Westbury, to facilitate the new micro-LNG plant.

“We would like to commence construction immediately after approval of our Development Application. The sooner the better of course as we are committed to the project and wish to build the plant, fleet fuelling stations and tankers as quickly as possible,” said Mr Dronoff.

“We are hopeful that we will receive Development Application approval sometime in the first quarter next year.”