Promotion of LNG Vehicle LNG Industry Chain Benefits


A few days ago, relevant sources of Shenzhen New Energy Automobile Project Office revealed that Shenzhen will promote the use of LNG heavy trucks in the logistics field, and the construction of supporting gas stations will also be on the agenda.

According to a report from the China Securities Journal, since 2012, local governments have successively promoted and popularized LNG vehicles, and many central and local policies have repeatedly mentioned supporting the LNG vehicle industry. It is expected that during the "12th Five-Year Plan" period, China will add 3,000 new gas stations, and the total number will reach 5,000. Intercity passenger vans and buses will use LNG extensively. Analysts believe that with the continuous development of industrial development, listed companies in the industrial chain will continue to benefit. The related concept stocks include: CIMC, Furui equipment, Beiren, Guanghui Energy, Guangzhou Development, Ankai Bus, Foton Motor, etc.

Local promotion of LNG vehicles

Although the relevant policies are still in the formulation phase, the intention of Shenzhen to promote LNG vehicles has exposed the tip of the iceberg. In an interview with a reporter from the China Securities Journal, a person in charge of the Shenzhen New Energy Automobile Project Office said that at the current stage, Shenzhen passenger transport will be dominated by new energy vehicles, and freight transportation will mainly develop in the direction of LNG. The source said that it plans to promote more than 20,000 LNG heavy trucks in Shenzhen's logistics sector by 2015 or a longer period of time. These LNG heavy trucks will mainly operate in the Pearl River Delta region, while non-LNG logistics vehicles will operate in other regions of the country. He disclosed that at present, there are about 60,000 heavy trucks in Shenzhen's logistics industry, and LNG trucks are used in the trailers in the Shenzhen port.

In fact, the promotion of LNG heavy trucks in Shenzhen is a microcosm of the promotion of LNG vehicles across the country. Shandong regards the promotion of LNG vehicles as a key task in transportation. In early 2012, the total number of new energy vehicles in Shandong Province reached 60,000, of which nearly 2,000 were LNG vehicles. For heavy trucks, Xinjiang has already begun to promote the use of LNG heavy trucks because it uses LNG fuel to save at least 30% of the cost compared to diesel. A person in charge of a car company expects that this year Xinjiang's LNG heavy truck sales will reach 5,000 vehicles, and in 2015 it will reach 50,000 vehicles, accounting for one-third of the total heavy-duty trucks in Xinjiang.

In order to purify the city air and promote the implementation of energy conservation and emission reduction, LNG buses have been promoted throughout the country. In 2012, Baoding City purchased 689 LNG buses to replace the diesel vehicles operating in the urban area. It has now been put into operation. In addition, Suzhou began to promote LNG buses from last year and 220 LNG buses were put into operation that year. Suzhou plans to invest another 300 LNG buses this year, expanding its capacity to 520 vehicles. Beijing Public Transport Group currently has 2,787 CNG buses and 560 LNG buses, and plans to invest 3,000 LNG buses.

The promotion of LNG must firstly promote the construction of gas station facilities. At present, there are not many LNG refueling stations in Shenzhen. If it is necessary to meet the refueling demand of 20,000 LNG heavy trucks, it is estimated that at least 80 refueling stations will be required. Treasure Island analyst Ma Ji told the China Securities Journal reporter that as of April this year, the total number of gas stations nationwide including CNG and LNG was 3483. Among them, there are about 400 LNG refueling stations nationwide. From a regional point of view, Shandong has the largest gas stations, with a total of 433 CNG and LNG refueling stations, followed by 381 in Sichuan and Xinjiang in 319. Gas stations have more than 100 provinces, municipalities and autonomous regions as well as Hebei, Henan, Shaanxi, Jiangsu, Hubei, Anhui, Chongqing, Inner Mongolia, Jilin and Guangdong.

According to reports, CNG and LNG are natural gas with the same composition, but their existence is different. CNG is compressed natural gas, which is natural gas pressurized and stored in a container in a gaseous state. LNG is liquefied natural gas, which can greatly save storage space and costs after liquefaction of natural gas, and has characteristics of large calorific value and high performance. From the perspective of promoting models, CNG and LNG are now mainly used in commercial vehicles. Among them, CNG is mainly suitable for urban buses and taxis, while LNG is not only suitable for urban buses, but also for large freight vehicles and intercity buses, especially long-distance vehicles. LNG represents the mainstream of the development of natural gas vehicles.

Policy support industry development

The development of the industry requires policy support, and various ministries and local governments have successively introduced policies to promote the development of the industry.

Since 2011, the Ministry of Communications has launched a special fund for energy conservation and emission reduction projects. Taking the first batch of support projects in 2012 as an example, there are 30 natural gas automotive application projects, accounting for 30% of the total project period, and 62.31 million yuan of subsidies, accounting for 41.54% of the total for the current period. It is not difficult to see from the fact that the policy has a considerable influence on the application of natural gas vehicles.

The Interim Measures for the Management of Special Funds for Transportation Energy Conservation and Emission Reduction jointly issued by the Ministry of Communications and the Ministry of Finance clearly states that, for projects that can quantify the amount of energy saving and emission reduction, the award funds are linked in principle with energy conservation and emission reduction, and the completion of energy conservation and emission reduction is completed. The target project undertaker gives a one-time reward. According to the annual energy saving amount of not more than 600 yuan per ton of standard coal or the use of alternative fuel per ton of standard oil is replaced by the award of not more than 2,000 yuan, the subsidy for a single project in principle does not exceed 10 million yuan.

The “Guidelines for the Construction of a Low-Carbon Transportation System” issued by the Ministry of Communications pointed out that the promotion and application of alternative energy sources should be accelerated, and the application of alternative energy technologies in commercial vehicles should be encouraged. We will actively use and promote energy-saving and environment-friendly city buses such as hybrid power, natural gas power, biomass, and energy, and launch pilot projects for new energy taxis. In areas where conditions permit, it is encouraged that road transport companies use natural gas, hybrid power, and other types of fuel vehicles, and encourage the construction of alternative fuel distribution facilities such as natural gas filling stations along the main highways.

The "Natural Gas Utilization Policy," announced by the National Development and Reform Commission and implemented in December 2012, classifies natural gas users as priority, permissible, restricted, and prohibited. LNG vehicles are classified as preferred. The "Natural Gas Utilization Policy" pointed out that the priority categories include natural gas vehicles, especially dual-fuel and LNG vehicles, including natural gas as fuel for city buses, taxis, logistics vehicles, passenger cars, sanitation vehicles and trucks. transport vehicle.

In addition, in order to support the development of the LNG automotive industry, Shandong, Guangdong, Zhengzhou, Henan, Taiyuan, Shanxi, and other development plans also involve LNG vehicles and LNG refueling stations. The “Guangdong Province New Energy Vehicle Industry Development Plan (2013-2020)” announced by the Guangdong Development and Reform Commission in March this year proposes that by 2015, Guangdong’s new energy automobile production capacity will reach more than 200,000 units, and the cumulative production and sales volume will reach 50,000. Vehicle. The Guangdong Development and Reform Commission stated that in the future, LNG vehicles will focus on the development of LNG tanks, LNG vaporizers, and controllers. For supporting facilities, encourage the development of LNG vehicle refueling equipment.

According to the analysis, the country should strengthen the cultivation of the LNG vehicle market, define the development goals, formulate development plans, and prioritize the development of the LNG vehicle industry in the regions where conditions are based on local characteristics and advantages.

Many companies actively layout

Some analysis predicts that during the “Twelfth Five-Year Plan” period, China will add 3,000 new gas stations and the total number of refueling stations will reach about 5,000, which may form the world's largest natural gas vehicle refuelling network. Among them, in addition to the continued use of CNG by taxis and some buses, LNG will be widely used for intercity passenger and cargo vehicles and new buses, and the proportion of the latter will increase substantially. At present, there are more than 14 million road transport vehicles in China. If a large number of LNG are used as fuel in the future, the LNG vehicle market will have the potential for explosive growth, which will drive LNG engines, LNG cylinders, and LNG vehicles to complement LNG vehicles. Gas station equipment and LNG small liquefaction equipment and other equipment are rapidly developing. It is precisely this prospect of development, many listed companies have already begun to actively layout.

In July 2012, Beiren announced the reorganization plan and plans to invest in the assets of gas storage and transportation equipment such as Beijing Tianhai Industrial Co., Ltd. Tianhai Industry is one of the largest industrial cylinder manufacturers in China and has a market share of nearly 50%. It is developing CNG and LNG equipment. If the reorganization is successful, Beiren will become a gas storage and transportation equipment manufacturing company. Its main business includes industrial gas cylinders, CNG equipment, and LNG equipment. However, Beiren’s shares announced in January this year that it was notified by the China Securities Regulatory Commission that the relevant parties involved in the company’s major asset replacement were suspected of illegally being investigated and placed on file. The company's merger and reorganization application was suspended by the China Securities Regulatory Commission.

As one of the world's largest integrated LNG business development companies and one of China's largest LNG suppliers, Shell Group is actively developing China's LNG-related midstream and downstream businesses. Recently, Shell (China) Co., Ltd. and Guanghui Energy Holdings subsidiary Guanghui Energy Integrated Logistics Development Co., Ltd. signed the “Letter of Cooperation regarding the Qidong LNG Distribution and Transfer Station Project”. Guanghui is planning to build the "Nantonggang Lüsigang District Guanghui Energy LNG Distribution and Transfer Station" project in Qidong City, Jiangsu Province, and Shell will participate in project cooperation.

Guangzhou Guangzhou Gas Group Co., Ltd., a wholly-owned subsidiary of Guangzhou Development, has planned to invest in and construct Guangzhou Lchongwei LNG vehicle refueling station project that has recently been approved by the Guangzhou Municipal Development and Reform Commission. The LNG refueling station in Guangzhou's Luo Chongwei LNG refueling station is designed to have a gas refueling capacity of 30,000 cubic meters/day and a total investment of 19,591,300 yuan. The project is scheduled to be completed, commissioned and commissioned by the end of 2013.

According to the analysis, investment in the LNG industry should not follow the trend blindly. Investments should be made based on the company’s own advantages and characteristics combined with local specific conditions. Investment refueling stations should be more cautious, should conduct a full investigation to determine the location of filling stations to build, to avoid the problem of profitability caused by insufficient vehicles.



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