Ricardo Ortiz
General Manager
NEOmexicana
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View from the Top

Natural Gas Heralds Industrial Prosperity

Wed, 02/24/2016 - 12:38

Q: In what ways does the development of natural gas foster industrial and economic growth in a region?

A: Logically, the push for natural gas will demand investment from both the public and private sectors. Monterrey has been catalogued as one of the most important industrial hubs in the country and it is no coincidence that natural gas has been present for over 80 years. Today, Monterrey is a good example of what natural gas accomplishes as it fosters economic growth and job creation. Given the limited pipeline infrastructure, efforts have been made to promote this resource using virtual pipelines. A compression site is built and the compressed gas is then channeled into carbon fiber containers that can supply to a 300km radius surrounding the base. Virtual pipelines give access to industries and vehicle charging stations, and foster the arrival of the pipelines. Virtual pipelines help generate the critical mass of consumption needed to justify the infrastructure investment.

Q: Which markets stand to benefit the most from this peak in natural gas and which segments is NEOmexicana targeting?

A: The first area of opportunity is the industrial market with companies that do not have access to the natural gas infrastructure, and NEOmexicana is there to offer a cheap and competitive solution. For instance, we supply gas to an automotive supplier called Saint Gobain, and it has obtained significant savings by opting for natural gas and removing fuel oil from its operations. We supply natural gas to Nissan for its painting furnaces, and this reflects the diverse applications of this fuel. We are also promoting the development of natural gas in vehicle applications and urban transport. NEOmexicana is taking advantage of the evolution of technology and the fact that buses and trucks now feature natural gas engines. This solution is especially attractive for fleets, buses, and urban routes. We use the concept of mother-daughter charging stations, this means we build a compression site and then transport the gas using a special unit to the vehicle station that is denominated the daughter site, where vehicles can be charged. Through the patented technology of our partners, NEOGas of Brazil, we are able discharge the natural gas from the container to the vehicle without losing its compressed state.

Q: In what ways does the development of some industries such as automotive impact the adoption of natural gas as the fuel of choice?

A: In late 2015, we are launching the first daughter vehicle charging station that will be supplied by a mother station located in Puebla, with a view to satisfying the urban routes in the State of Mexico. The technology we have developed is called HPU, which uses hydraulic power to efficiently displace the gas from the container to the vehicle while maintaining constant pressure. This technology reduces energy consumption, it is 40% faster than alternative technologies, and it eliminates the need for using an additional compressor to replenish the pressure. We are creating alliances with fleet owners, municipal governments, and urban routes. We are also developing programs to convert older, polluting diesel transit buses and trucks to run on clean natural gas. We are working alongside a heavy duty OEM that uses Cummins engines in order to carry out tests to evaluate the performance of engines running on natural gas. In this program we are evaluating engine wear and all the working conditions of the trucks in order to share this information and technology with other automotive players. There are many competitive advantages to natural gas. The first is the price that enables the company to carry out additional investments in other business areas, and another is the level of emissions that are considerably lower compared to other fuels.

Q: What role will NEOmexicana play in the medium term to promote the adoption of natural gas for both industrial and automotive applications?

A: We want to be leaders in this transitional period in Mexico. Firstly, we will provide a competitive solution to industrial players and secondly, we will help the automotive industry take advantage of the push the government has made towards natural gas. Countries like Argentina have implemented strong natural gas initiatives and today it has 1.5 million vehicles running on natural gas, which represents 15% of its total vehicle park. In the case of Mexico, only 5,000 vehicles operate using natural gas and the vehicle park is much larger than that of Argentina. Mexico is in an advantageous position, since it has the opportunity to import cheap natural gas while simultaneously increasing levels of production.