IMW Comments on China Experience

| China

Urumqi in Western China has experienced “incredible” NGV growth

IMW Industries, manufacturer and supplier of turn-key fueling systems for CNG stations and bulk CNG systems, has now completed construction of more than 100 CNG stations in China, as well as numerous CNG stations throughout the Asia Pacific region, in Indonesia, Malaysia, Thailand, Vietnam, Japan and South Korea. As a company immersed in China since 2000 and establishing a sales/service hub in Shanghai in 2006, IMW has had opportunity to observe, appreciate and comment on development of the natural gas industry in this dynamic country, as follows.

Since the 1990s, the exploration and development of natural gas in China have been making remarkable advances. The availability of natural gas is growing year by year due to the completion of significant domestic pipeline infrastructure projects that connect to neighbouring countries’ pipelines. Likewise, the amount of imported LNG in coastal areas of Southeast China is steadily increasing. This relatively recent abundance of natural gas provides the backdrop for the development and growth of NGV usage in China.

With increasingly severe pollution and environmental issues facing many areas, natural gas has been proven to be one of the most effective alternative fuels. In fact, “NGV” is quickly becoming synonymous with “energy savings” and “clean” in the minds of China’s vehicle owners. Meanwhile, in the process of developing “energy efficiency” and “optimization of transportation infrastructure”, which is advocated by the Chinese Government, the use of NGVs is becoming a hot topic in the field of urban planning.

IMW says there are many examples of where NGV use is growing rapidly in China, citing figures announced by local governments. In Urumqi, capital of China’s most western province and where natural gas is particularly abundant, the growth rate of NGV adoption is incredible. In 2009, natural gas consumption for vehicle use was 240 million cubic meters; in 2010, this figure reached 350 million cubic meters, an increase of 45.8%. Urumqi boasts 7,000 taxis, 4,000 public buses, and more than 10,000 private cars that use natural gas as their fuel, but they are not alone in this growing trend. Hainan Province has constructed one CNG, one LNG, and one LPG plant. With Haikou-Sanya cities as the axis, 30 alternative fuel stations of different types have been built along the highways to service a wide variety of public transportation and heavy duty vehicles in the Province.

In addition to alleviating pollution and environmental issues, the popularity of NGVs in China can be largely attributed to the price difference between natural gas and oil. In those productive areas like Inner Mongolia or Gansu, the price of natural gas for vehicle use is about 50% of the price of conventional liquid fuels. Even in areas such as Shanghai, Anhui, and Zhejiang, where there is less availability of natural gas, the price for natural gas vehicle fuel is still only 70% of the price of liquid fuels.

At present, there are a total of 550,000 NGVs and nearly 1,700 natural gas refueling stations in China.

These figures are increasing rapidly each year, encouraged by more than 60 NGV OEMs that have developed in China. In relation to the number of NGVs, the capacity of the existing fuel stations is still insufficient. This raises the familiar “chicken or egg” problem found in many developing areas.

Fortunately, both the government and the natural gas station operators realize the importance of building more refueling stations. For example, Hainan Province plans to add 100 CNG and LNG stations by 2014, while Dongguan City in Guangdong Province plans to have 60 stations by the end of 2020.

To encourage more vehicles to use LNG fuel, the Lianyungang and Xuzhou governments provide a subsidy of 2,000 Yuan (USD 310) to car owners for retrofitting. These policies and actions have delivered a positive signal indicating that the natural gas fueling market will be prosperous in the following years.

The Asia Pacific Natural Gas Vehicles Association (ANGVA) will be holding its biennial natural gas vehicle conference in Beijing, in October this year.

This item compiled using information from IMW Industries and was first published in Asian NGV Communications in April 2011.

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