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Shell, Volvo Trucks Sign LNG Agreement

Volvo Trucks and Shell have agreed to cooperate globally on advancing liquefied natural gas as a fuel for commercial heavy duty trucks.

Based on Volvo’s MethaneDiesel concept whereby LNG can be used in diesel engines, and Shell’s LNG expertise and infrastructure investments, the two companies say they will coordinate their activities and support the wider use of LNG in the transport sector.

The collaboration agreement is underway and the companies say work has begun with the first stage focused on selected markets in central Europe and the US.

Natural gas is today used in compressed form (CNG) in city buses and smaller commercial vehicles. However, to perform long-haul assignments the vehicle must be able to carry a larger amount of fuel on board. This is made possible if the engine can run on LNG since the gas has a smaller volume in liquefied form.

The Volvo FM MethaneDiesel (pictured) is equipped with methane-diesel technology and uses liquefied gas as its main fuel. The proportions are up to 75 percent gas and 25 percent diesel, depending on the type of transport and driving cycle, Volvo says. Its driving range is about 1,000 km on gas, and it can run on both LNG and liquefied biogas.

The truck is already available in Sweden, Norway, Belgium, Spain, the Netherlands and the UK and its market roll-out is expanding into Italy and France.

In other LNG news, GE Oil & Gas has received a $620 million contract to provide a range of technology services for QGC’s Queensland Curtis LNG (QCLNG) plant off the east coast of Australia.

QGC’s parent company BG Group and GE say the plant will be the world’s first facility to turn coal seam gas into LNG. The QGC plant is the first of four LNG projects scheduled for Curtis Island and is expected to begin production in 2014, with the LNG produced primarily targeted for export including to China, Japan and Singapore.

When used as a substitute for coal, LNG from the QGC project could reduce greenhouse gas emissions by more than 35 percent, the companies say.

In his speech earlier this month at the IHS CERAWeek 2013 energy conference in Houston, GM CEO and chairman Dan Akerson called for increased use of natural gas as a motor fuel. He said a typical 5,000-vehicle light-duty fleet could save at least $10 million annually by switching to CNG, and a typical Class 8 operator could save $2,500 to $3,500 per month by switching to LNG. But there are only about 1,200 CNG stations nationwide, with half in just five states, and only about 66 LNG stations in 10 states.

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