Mumbai: Confidence Petroleum has entered into a joint venture with natural gas and adsorbed natural gas (ANG) technology leader Energtek Inc of the US to provide clean and affordable pipe less natural gas supply to automotive and industrial consumers.

The main problem faced in harnessing natural gas arises from the fact that being lighter than air, it is extremely difficult to transport, and to store. Adsorbed Natural Gas (ANG) technology provides cost-effective storage of natural gas, by maximising tank storage capabilities, using activated carbons that are placed inside the tank to 'adsorb' greater quantities of gas, similar to a sponge. This makes for more efficient storage, transportation, and utilisation of natural gas, as it does not need to be pressurised to the standard 200 bar, and is stored in ANG tanks at 60 bars.

Explaining ANG technology, the company said that it creates two possibilities:

• Similar volumes of gas can be stored in the same container at a lower pressure significantly reducing the costs of refueling infrastructure, and fuel costs for the driver. Plus, lower pressure allows greater flexibility in natural gas tank design, as opposed to standard cylindrical natural gas tanks.
• Larger volumes of natural gas can be stored in the same container, at the same pressure enabling vehicles to significantly increase driving range, without increasing the size of the tank.

The two companies signed a memorandum and joint venture agreement at the press conference. In the first phase of the joint venture, Confidence Petroleum will make an investment of Rs100 crore for co-owing Energtek's subsidiary Primecyl LLC. A new, fully-owned subsidiary of Primecyl LLC, named Confi Energtek Asia Ltd will be established in India to carry the joint venture businesses in India and Southeast Asia, including Bangladesh, Indonesia, Thailand, Singapore, Philippines and Pakistan.

Primecyl LLC also owns Ukcyl Ltd., a manufacturing facility for high-pressure cylinders in Ukraine.

"We are Asia's largest LPG Cylinder Manufacturer and also India leading parallel LPG bottler in India," said Nitin Khara, chairman and managing director, Confidence Petroleum India Ltd.  "Keeping in line with our growth strategy, we are aggressively planning to establish ourselves in the natural gas energy segment. This JV is one step towards achieving our goals.

"Currently, there are over 1 billion motor vehicles on the road worldwide, and a growing majority of oil in the world is consumed annually by automobiles. While other energy consuming sectors have alternatives to oil fuel, only the automotive sector has continued to increase yearly oil consumption. Socio-economic developments including the skyrocketing price of oil and increased in pollution have caused governments, businesses and consumers to seek alternative fuel supplies, and diversify their energy resources. Natural Gas is the most practical existing motor fuel alternative to petrol. Our plan is to take ANG across India and make it available across all small & major cities of India."

Energtek Inc, has subsidiaries in the US, India, Ukraine, and Israel, and has proprietary adsorbed natural gas technology solutions to distribute clean energy.

"The partnership with Energtek Inc, is a perfectly synergistic alliance and both of both companies say they are poised to gain from the growing demand for alternative fuel supplies worldwide," said Khara.

Taking about the benefits of running vehicles on natural gas, Lev Zaidenberg, CEO of Energtek Inc. said that natural gas provides a clean and affordable alternative to oil, and the ANG solution enables clean, cost-efficient natural gas supply solutions for two and three wheel automotive fleets, such as those found in India, and other South East Asian countries. With around 300 Million two and three wheel vehicles on the road, implementing a FIT (Fast Interchangeable Tanks) System for 2-3 wheelers can see the transition of the bulk of the two and three wheeler automobiles on the roads to more cost effective and cleaner natural gas fuel.

Under the FIT system, tanks are filled in a central station, with local tank distribution using trucks, similar to the distribution mechanisms followed by oil companies for LPG cylinders for household consumption. A two or three wheeler can have its tanks replaced on the vehicle in less than a minute, and even conversion of the vehicle to natural gas is a simple, and affordable process. On the infrastructure front, the system eliminates the need for costly refueling stations, as there is no need to compress the gas to 220 bars as it is presently done at CNG stations.

Another benefit, Zaindenberg explained, is that ANG technology harnesses the possibilities of utilising "stranded gas." He said that presently, explorations that result in gas finds do not necessarily get tapped, as the quantities of gas discovered need to justify the costs of a pipeline to transport it to the point of consumption. Using ANG technology, trucks and semi-trailers  or rigs fitted with the customised system can travel to the source of the find, and transport the gas to consumption centres easily, eliminating the need for a pipeline altogether. Moreover, it makes better business sense, as these stranded gas locations are often willing to sell the gas at discounted prices, so that the exploration company can at least cover its costs, if not make a profit on the find.

Benefits of running vehicles on natural gas include:

• Instantly reduced pollution
• Drivers save approximately 50 per cent of the price equivalent of gasoline
• Natural gas supply for consumers not connected to pipeline - implications for fuel availability for the industry
• Low-pressure Mobile Pipeline
• Safe transport using customized semi-trailer design, saves on infrastructure, compressing, energy costs
• Opens the NG market to new consumers who could not previously use natural gas

The joint venture expects to start operations in about two months, said Vimal Barwal, director of corporate finance, Confidence Petroleum. He said that the necessary regulatory approvals have been applied for, and operations would commence once they have been received. The venture expects a net profit of Rs150-180 million rupees, on revenues of Rs800 million in the first year, he said that the press conference.