Analysis of a growing market – 2019 review
The small-scale gas market in France captures all the uses of natural gas outside the interconnected national gas network.
It relies on two products (Liquefied Natural Gas [LNG] and Compressed Natural Gas [CNG]) and two distribution chains (LNG trucks or pipeline and then trucks) to supply three main energy end-uses: (1) road fuel for light-duty vehicles, buses and small trucks, (2) road fuel for heavy-duty trucks (road tractors), and (3) fuel in industrial processes for sites where connection to the gas grid is not possible.
We estimate that the small-scale gas market size was around 3.3 TWh in 2019 (+18% vs. 2018; 2.8 TWh), which represents around 0.7% of the total natural gas consumption in France.
The development of the small-scale natural gas market is supported by new supply infrastructure, notably LNG terminals equipped with truck loading bays and the development of LNG & CNG fuelling stations.
In 2019, small-scale natural gas was mostly priced in reference to the substitute oil products. Indications from competitive tenders point to a weighted average end price of small-scale gas of 42.39 EUR/MWhGCV in 2019, at a discount compared to 89.31 EUR/MWhGCV for oil products, (weighted average of diesel and gasoil).
Natural Gas for Vehicles (CNG for light-duty vehicles and LNG for trucks) and LNG retail to industry are two separate markets, with different competitive environments. Former French gas monopoly marketer ENGIE dominates the retail market for road fuel while competition on the industrial segment appears to be more fragmented.