Mumbai: Hinduja group company Ashok Leyland Ltd has signed an agreement with Australia's Eden Energy Ltd, for the supply of environment-friendly, hydrogen-enriched technology for its natural gas powered buses.

The 10-year hythane engine conversion and marketing agreement provides a major opening for Eden's patented hydrogen and natural gas fuel blend, Hythane to be introduced across tens of thousands of public transport vehicles in India.

The first set of Ashok Leyland engines have been sent to Colorado in the US for modification and demonstration trials, said Greg Solomon, executive chairman, Eden Energy. "India is a massive potential market with high public sector transport operations and high traffic pollution levels demanding redress across any number of large cities," he said.

Ashok Leyland currently manufactures more than 80,000 vehicles per year including 11,000-14,000 buses, and provides the majority of all metropolitan state transport buses in India carrying over 60 million passengers per day.

"The company is also a major manufacturer of trucks and defence equipment," pointed out Solomon. "Any successful test programme therefore leading to the commercialisation of Hythane provides Eden Energy with a tremendous base for its Indian operations, and the potential to expand into the truck, generator, locomotive, car, taxi fleet and three-wheeler auto-rickshaw markets."

Under the terms of the agreement, the 100 per cent owned Eden subsidiary, Brehon Energy PLC will through its US subsidiary, conduct the Hythane engine recalibration on the Indian engines at its test facilities in Colorado.

The engines will then be installed for testing and demonstration purposes in 2007 in Delhi, Mumbai, Ahmedabad and Kanpur - cities where compressed natural gas is available.

"We are hopeful of widening the test base program as the Indian Government recently announced an immediate five-year programme to expand the natural gas pipeline network to cover up to 60 per cent of all vehicles in India and to increase the available annual natural gas tonnages from 5mt to 25mt," Solomon said.

Natural gas-powered public busses in India are also anticipated to match this growth and Eden's objective is "for a large percentage of these to be operating on hythane",  as natural gas in India currently sells for less than 50 per cent of the cost of diesel.

With the marketing agreement signed, Eden / Brehon now plan to establish a joint venture in India with a major Indian partner to manage the rollout of hythane in the country.