The Minister for Resources and Energy, Martin Ferguson AM MP, has attended the signing of a contract between BOC Limited and APA Group which will see the provision of up to 100 tonnes of liquefied natural gas (LNG) a day for the heavy transport sector.
The expansion of the companies' existing contract will bring the east coast of Australia closer to having a chain of LNG re-fuelling stations for trucks that have been converted to use gas.
Trials have shown that the best natural gas vehicle technology burns gas cleanly and efficiently. Using LNG for heavy transport can also reduce costs when diesel prices are high.
Under the agreement signed today in Dandenong, up to 100 tonnes a day of LNG will flow from BOC's liquefaction facility through storage infrastructure in Dandenong to a truck re-fuelling terminal, expanding on the current arrangements for bulk loading. Minister Ferguson said this long-term contract increases the commercial availability of LNG in Victoria.
'This is more than just a new business opportunity - it's a new industry. LNG is coming of age as a transport fuel, providing a clean and cost-competitive alternative to diesel. Competition is always good for business and LNG is really the first alternative to diesel for the heavy transport sector. If more engines can be optimised to run on natural gas, contracts such as this one could spur many more.
'When it comes to the future of Australia's transport energy needs, we won't put all our eggs in one basket. We need a range of alternative fuels and vehicle technologies for energy security and to reduce urban air pollution,' he said.
The Australian Energy Resource Assessment shows gas will play a bigger role in the domestic energy market, with gas accounting for a third of Australian primary energy consumption by 2030.
Both APA and BOC are well-positioned to benefit from the future growth of Australia's gas industry. BOC, for example, is on track to become the first company in Australia to produce LNG from coal seam gas.
With around ten million vehicles worldwide fuelled by natural gas, Minister Ferguson said a network of re-fuelling stations along the east coast of Australia can be a model for others to follow.
'LNG is a logical and clean alternative fuel for the heavy transport industry in Australia. This contract paves the way for Australian companies to lead in this area and is good for jobs, good for investment in alternative fuels and good for competition. I hope to see more like it in the future,' he said.