Chart Industries CEO Jill Evanko has told gasworld the company will expand its railcar business after the bulk transportation of liquefied natural gas (LNG) by rail was authorised in the US.
The rule – issued last week by the US Department of Transportation (USDOT) and the Pipeline and Hazardous Materials Safety Administration (PHMSA), in consultation with the Federal Railroad Administration (FRA) – allows the use of cryogenic railcars to ship LNG from production plants to destinations across the US from late July.
US-based cryogenic gas equipment manufacturer Chart Industries makes cryogenic railcars at its New Prague, Minnesota plant that can each haul 30,000 gallons of LNG, and CEO Jill Evanko says the company will expand its railcar business as a result of the rule change.
“Not only will the LNG by rail order expand direct railcar business for Chart, it will further support our small-scale LNG efforts,” Evanko told gasworld.
“We also believe the railcars will create demand for pump based loading and unloading skids and stationary storage tanks at delivery points. We have equipment immediately available for this application which would be sold under our trademarked ‘GBR® (Gas By Rail)’ brand. Our New Prague, Minnesota facility has capacity and is an AAR QA (M-1003) and Tank Car Committee (M-1002) approved facility.”
Evanko continued, “We currently have one order we are working on and another active proposal for liquid ethylene railcars. Related to our $21m order for a customer in Mexico for LNG by rail which was booked December 31, 2019, this order has been described by our customer as ‘Phase I’. Phases II and III could involve a total of 300 locomotives and 150 tenders. The product is Chart’s 12K LNG Fuel Tender which stores ~11,200 gallons of LNG on board the tender, and delivers gaseous natural gas (GNG) to one or two locomotives on demand at various flow rates.
“Since the announcement of the Executive Order in early 2019, there has been increased interest in our LNG tank cars for transporting LNG by rail as freight – for both domestic consumption and for export.”
LNG, natural gas that has been refrigerated to -260°F (-162°C), is used to generate electricity in remote areas off the traditional power grid and also provides critical services like residential and industrial heating and cooking.
Evanko believes LNG by rail could work across North America:
- US to Mexico: “Displace some truck volumes currently moving from Texas to Mexico; lower cost and safer transport”
- Within US to New England and New York State, and to West Coast and Pacific North West: “Rail has right-of-ways in place that pipelines don’t have”
- US to Canada: “Canada approved LNG by rail in 2014; but now with US approval, the market is much larger”
Railcars can lower the cost and environmental footprint required to move the LNG, according to Evanko. Compared to traditional heavy fuel oils and coal, LNG provides significant reductions in greenhouse gas emissions.
Evanko said, “Rail typically has a fee per trip per car; highway is a cost per mile. Long highway runs often require a sleeper cab and two drivers. So, in general our, team’s opinion is that LNG by rail is competitive with and more cost effective than highway on longer distances. In the US, the rail tank car will carry ~30,000 gallons, versus ~10,000 gallons in a highway trailer – 1/3 the units to move X gallons, and 1/3 the loadings and unloadings to make.”
There are also claims that LNG by rail is safer. According to the Association of American Railroads, “railroads have approximately 10% of the hazmat accidents trucks have despite roughly equal hazmat tonne-mileage”.
The new rule authorises the transportation of LNG by rail in DOT-113C120W specification rail tank cars with enhanced outer tank requirements that is thicker and made of steel with a greater puncture resistance to provide an added measure of safety and crashworthiness.
There will also “be operational controls in the form of enhanced braking requirements, remote monitoring, and route analysis, which are intended to exceed current safety requirements for other flammable cryogenic materials,” according to a government document.
The Pipeline and Hazardous Materials Safety Administration made the rule change “because we have determined that bulk rail transport is a safe alternative for this energy product”. It had previously been prohibited, except for with a special permit, transport LNG by rail.