LNG production and development of natural gas vehicle fuel infrastructure for mining equipment
Status: Prospective initiative. Current stage: Pre-project study.
Initial implementation region: Kemerovo Region, Kuzbass.
Sector: Energy, natural gas vehicle fuel, mining industry.
About the project
LNG Mobile is aimed at expanding the use of liquefied natural gas in the mining industry.
The project envisages the creation of small-scale LNG production facilities located close to major industrial consumers, with the organisation of storage, delivery and direct refuelling of mining dump trucks.
Its main objective is to reduce the operating costs of heavy mining equipment by using natural gas instead of diesel fuel.
Initial implementation is being considered in Kuzbass, with the possibility of subsequently extending the model to other mining regions of Russia.
Economic efficiency
The use of LNG makes it possible to substantially reduce the fuel costs of mining companies.
The planned saving on annual motor fuel costs is 40–50%.
The planned reduction in annual motor fuel costs when converting mining equipment to LNG is 40–50%, depending on operating conditions and fuel prices.
The economic effect is generated by the difference in the cost of the fuels used and by the organisation of local production and refuelling infrastructure.
Locating production close to open-pit mines makes it possible to cut transport costs and ensure a stable supply to the equipment.
Where several companies are within transport reach, a single LNG facility serving several open-pit mines at once can be created.
Benefits for participants
Mining companies
Lower fuel costs and lower cost of hauling rock mass, the opportunity to expand the use of natural gas-powered dump trucks, and greater predictability of long-term fuel supply.
Mining equipment manufacturers
Development of the market for natural gas-powered dump trucks, an increase in potential sales volume, expansion of after-sales service and of opportunities to renew the existing fleet.
Leasing companies
Expanded financing of mining equipment, development of long-term relationships with industrial consumers, growth of the potential portfolio of leasing transactions and of opportunities to participate in fleet modernisation.
LNG equipment manufacturers
Creation of demand for liquefaction facilities, cryogenic tanks, mobile refuelling units, engineering solutions and after-sales service. The opportunity for serial supplies as the project is replicated.
Gas industry
Expansion of industrial consumption of natural gas, development of the natural gas vehicle fuel market and of opportunities for its use in the mining industry.
Scaling up
The proposed model is focused not only on a single open-pit mine but also on the creation of regional LNG infrastructure.
Depending on the location of the companies, one production facility can serve several industrial consumers.
As the infrastructure develops, the model can be applied in other coal-mining and mining regions of Russia.
Role of the VTOA Cluster
The VTOA Cluster Association carries out project studies, builds industrial cooperation, liaises with technology and financial partners, analyses economic efficiency and provides organisational support in preparing the project for implementation.
Project stages
- Stage 1. Pre-project study
Status: current.
Formulation of the concept for LNG facilities for mining equipment, of a preliminary economic model and of options for industrial cooperation.
- Stage 2. Engineering and investment preparation
Status: planned.
Refinement of the technical parameters of the facilities, gas supply, logistics, capital costs and the commercial model.
- Stage 3. Design, construction and commissioning
Status: prospective.
Implementation of the first production facility after the necessary technical, contractual and investment decisions have been taken.
- Stage 4. Development of the LNG facility network
Status: prospective.
Expansion of the pool of industrial consumers, development of refuelling infrastructure and replication of the model in other regions.
Project export potential
International applications may be assessed as the project develops. The Cluster can support market research, partner search and the adaptation of technology for overseas customers.
The Cluster supports demand assessment, partner search, cooperation, product adaptation and overseas market development for Russian technology.
International opportunities for members ↗Cluster coordination
The Cluster assesses industry demand, connects developers, manufacturers and customers, coordinates requirements and supports preparation for qualification or pilot deployment. Testing, production and commercial supply are performed by the competent parties.