The main beneficiaries will be the emerging fleet fuelling market, according to BOC.

“LNG is significantly cheaper than diesel for heavy haulage, however there has been very limited supply available, constraining its use,” BOC said.

“The environment will also benefit, as LNG releases 20 percent less greenhouse gases compared with diesel-powered trucks.”

BOC general manager LNG Alex Dronoff said the redevelopment was part of the company’s long-term commitment to LNG for the domestic market.

“We are currently the only company producing LNG for the domestic market in Victoria and the redevelopment is an important part of our $150 million investment plan into the LNG market on the east coast,” Dronoff said.

BOC has been using a large portion of the LNG produced to liquefy its gaseous nitrogen which is sold into the industrial market. But now it is installing a new nitrogen liquefier and upgrading its LNG plant.

“This will enable us to release the LNG direct into the market and increase our supply of LNG from 50 tonnes per day [18,250 tonnes per annum] to 150 tonnes per day [54,750tpa],” Dronoff said.

Interest in LNG for heavy transport, particularly long-haul trucking, is growing rapidly.

Wesfarmers is building a mini-LNG plant in Perth, which will use Santos gas from the John Brookes field as feedstock, for the Western Australian fleet market.

Meanwhile, Norwegian company Liquegas is building a 100tpd [36,500tpa] plant near Daandine, South Queensland, which will use Arrow Energy-supplied coal seam methane as feedstock.

There are also plans to develop a mini-LNG plant in Tasmania for the state’s logging industry.

BOC became the first company in Australia to produce LNG when it established the Dandenong facility in 1980.

Since then it has been producing LNG primarily to back up the Victorian gas grid through its association with the LNG storage facility owned and operated by the APA Group.

BOC said the new plant will be on line in August 2009.