The future? Just step on the gas
CNG Holdings, through its operating companies Virtual Gas Network and NGV Gas, is carving itself a niche in the energy sector with its compressed natural gas technology that holds the promise of alleviating SA’s dependence on conventional fuels.
It is early days yet to gauge success for this pioneering company that has imported the technology from Italy and Argentina, but if the international experience is any indicator of the potential for gaspowered vehicles and even off-thegrid power generation then CNG is poised for strong future growth.
Compressed natural gas is not yet widely adopted locally in transport, commercial or industrial operations, despite the technology having successfully gained traction around the globe. What’s encouraging is that SA has a ready supply of natural gas currently supplied from Mozambique and this could be supplemented by local supply if government’s Oceans Phakisa project is able to unlock the country’s estimated 60-trillion cubic feet of offshore gas.
For CNG Holdings director, Zazi Dladla, the opportunity is clear-cut.
He says that the company’s growth potential is enormous, even within the fairly limited scope that it has explored thus far. CNG has set its immediate sights on the public transport sector where it has already converted 700 minibus taxis to run on natural gas and recently won a tender to supply CNG to Johannesburg’s Metro Bus fleet.
These conversion kits allow petrol and diesel vehicles to also run on compressed natural gas, which has shown to reduce fuel consumption by at least 20%.
The company has established a flagship natural gas filling station in Langlaagte, Johannesburg, a second in Dobsonville, Soweto and plans to expand the footprint to Mamelodi, Pretoria. Dladla says the initial goal is to convert 1,000 minibus taxis by 2016, which is still a drop in the ocean considering that Gauteng’s taxi fleet is estimated to consist of about 250,000 vehicles.
Each of the stations is able to service 500 taxis, trucks and buses a day at an average refuelling time of five to six minutes per vehicle. The aim is to increase this to 7,800 vehicles a day.
Natural gas is widely used internationally, with the technology adopted in more than 100 countries in which more than 25-million vehicles have made the switch.
CNG Holdings’ vision for a gaspowered world would not have been possible without the support of the Industrial Development Corporation (IDC). The development finance institution acquired an initial 26% stake in the business, which has subsequently grown to 38%.
“Our business would not have been possible without the IDC,” he adds. “It is fantastic to have someone believe in your idea, especially in a new sector. They have also helped through nonfinancial support by way of introductions and linkages to other industries, although we feel that the government could be doing more to support our vision.”
This is not to say that the state has not bought into CNG’s vision. The company has successfully won contracts with four Gauteng Department of Health hospitals that have converted their operations to use gas instead of coal or light fuel oil to operate their boilers.
One of the benefits of compressed natural gas is its versatility as it can be used for heating and cooling, power generation and to run furnaces, boilers and driers.
CNG Holdings has also overcome the challenge of supplying customers without the need to lay new pipeline infrastructure by establishing gas storage units at customer facilities. These are topped up by a fleet of vehicles that can quickly and efficiently transport the gas to these locations.
This option has also proven popular with industrial customers who are not only able to record cost savings over traditional fuel sources, but also seriously consider moving their operations off the grid. Security of electricity supply is vital to operations that cannot afford downtime due to electricity blackouts and load shedding.
Dladla says the company is constantly looking to expand its gas-powered vehicle market, which comes with associated opportunities for entrepreneurs who wish to operate gas filling stations, and workshops to install conversion kits.
The company is also engaging with car rental companies that operate large fleets of vehicles.