Operators set to benefit from LNG market consolidation, says Gasrec

BOC and Calor Gas’ decision to quit the UK LNG market is a sign of market consolidation in the UK which will only benefit operators in the long term, according to Gasrec chief commercial officer James Westcott.

Speaking to motortransport.co.uk, Westcott said that whilst the closure of the Calor Gas and BOC sites was a blow to operators running LNG trucks - with some recently forced to park up their LNG trucks - the departure of BOC and Calor Gas will make for a more stable UK market.

He said: “What's happening now is that the market is consolidating ahead of significant investment and so those that remain will be the ones that are absolutely committed to rolling out infrastructure, whilst the ones that were testing the market, rather than definitely committed to it, have backed away from it.

“So I think in the longer term for operators it is good news, as they can have confidence that those now supplying the industry are fuly committed for the long term.”

Westcott was speaking in the week that Gasrec confirmed that it is to buy five Bio-LNG refuelling stations and four cryogenic trailers from BOC following the gas firm’s decision to withdraw from the UK LNG market.

These are additional to Gasrec’s overall plans to roll out three LNG filling stations a year.

Read more

• Gasrec swoops for LNG refuelling stations after BOC withdraws from UK market
• Hauliers left in limbo as BOC withdraws LNG supply from UK
• Gasrec to triple gas tanker fleet during next year as demand soars

Westcott said: “This year, of the ten facilities we are commissioning, seven will be at customer depots and the other three will be large open access facilities.”

The company is targeting large industrial parks and distribution centres as sites for its filling stations, as part of its infrastructure roll out strategy but is also committed to opening depot-based sites for individual operators.

“There has to be a balance. Where there are big distribution parks it makes sense to have larger facilities because of the economies of scale associated with that. But we will always have operators that aren't in or close to those DC parks. So we will have a mix of larger facilities providing good economies of scale for the operator and end users whilst also supporting facilities on depots where customers want that,” Westcott added.

Last December Calor Gas announced to customers it was closing its UK LNG stations after drivers repeatedly broke safety rules at the sites whilst filling their vehicles, leading Calor Gas to ban one operator from its sites and issue warnings to others, before it finally pulled out of the market.

Westcott said Gasrec is confident in the safety of its LNG stations, which he said are very different to those that were operated by Calor Gas.

“Running a gas facility at small scale is expensive. Putting ancillary safety services in can be prohibitively expensive. So running small LNG facilities remotely on a network basis isn't something that we would do, which is why we've invested in larger facilities and in customers’ depots.

“At a smaller facility, it is much harder to have that oversight on whether the drivers using it are correctly trained. When it's in a large open access facility like ours there is much more remote and on-site visibility and you can provide a much greater level of driver training to the operation at a customer depot.”