Diesel fuel is the second largest contributor to a mine’s operating costs after labour. Diesel cost is based on the commodity price plus the transportation cost, which can add a significant premium for remote mine sites. Replacing diesel with liquefied natural gas (LNG) in mine haul trucking fleets can lead to significant fuel cost savings for mines that have access to cheap and close natural gas. Hatch has studied the full life cycle for the adoption of LNG as a replacement for diesel fuel in mine haul trucking fleets.
This includes the transportation of natural gas to the LNG plant; the LNG production plant (small-scale plants in the order of 70,000 LNG gallons per day); the LNG logistics and the transportation to the site (by road, ship or train); the dual-fuel modifications to engines of mine haul trucks; and the purchase of new hauling trucks compatible with natural gas, which are expected to be available from major suppliers starting in 2017. Cutting-edge technologies are being developed to make LNG fuel adoption more efficient and doable, especially the new generations of duel-fuel engines as well as gas engines for heavy-duty mine haul trucks.
The Hatch studies found that savings of 30% to 50% can be achieved, depending on the particular mine site, by comparing LNG fuel with diesel. In particular, the northern Québec and northern Alberta LNG opportunities for the mining sector were studied in detail. Other opportunities for displacing diesel with LNG include oil and gas drilling and fracking; ship and locomotive engines; and boilers, furnaces, and remote power generation.
Adoption of LNG to displace diesel can be applied to mines in operation around the world where there is ready access to cheap natural gas or where LNG can be transported economically by ship to the mine’s operating port. The US and China are pioneering LNG fuel for diesel replacement. North America, thanks to the shale revolution, has access to abundant supplies of cheap natural gas. This has caused an average diesel-to-gas price ratio increase by one order of magnitude in various regions since 2009. It is expected that the price differential, as the main driver for diesel replacement with natural gas, will remain strong for the foreseeable future. Australia, Russia, Iran, and some parts of South America are also potential markets for LNG fuel adoption.
Moreover, air quality issues linked to exhaust from diesel engines have led to stricter environmental regulations. LNG is a much cleaner fuel compared with diesel, with a considerably smaller environmental footprint (less CO₂, SOx, NOx, and particulate matters)—another significant benefit in the move toward LNG as a fuel.
