CNG, LPG and biogas distribution: Unit economics
Fuel, terminal fees and the cost of carrying cylinders
What this tab covers What it costs to move a unit of energy this way: capital and operating costs, tariffs, utilisation and how it compares with the alternatives.LPG's cost is dominated by the fuel itself; terminal fees, shipping and cylinder distribution add the rest. Biomethane costs much more to produce than natural gas in most regions.
Key costs
| Measure | Value | Note |
|---|---|---|
| Landed US LPG in India | about 700 USD per tonne312 | March 2026, including freight and terminal charges; about 53 to 55 USD per MWh at 46 to 47 MJ per kg (calculated) |
| US Gulf Coast export terminal fee, peak | 165 USD per tonne1312 | September 2024 record; about 13 USD per MWh (calculated) |
| VLGC earnings (BW LPG average) | 50,300 USD per day2 | Q4 2025 time-charter equivalent; forward market priced about 85,000 for 2026 |
| Biomethane production cost | about 18 USD per GJ9 | Global average, about 65 USD per MWh (calculated); Europe averages about 74 euros per MWh |
| Energy in a 40-foot CNG module | about 116 MWh712 | 8,720 kg times about 48 MJ per kg (net calorific value of natural gas; calculated) |
Where the money goes
| Item | Share or amount |
|---|---|
| Fuel cost | Largest part of delivered LPG cost (landed about 700 USD per tonne in 2026)3 |
| Export terminal fee | Rose to a record 165 USD per tonne when capacity was tight in 202413 |
| Ocean freight | Set by VLGC day rates of roughly 50,000 to 85,000 USD per day2 |
Cylinder distribution is labour-intensive: each refilled cylinder is carried to the door and an empty one carried back. That makes LPG dearer per unit than piped gas in dense cities, which is why India is pushing piped connections. CNG trailers are a stopgap until a pipeline arrives. Biomethane relies on subsidies or carbon prices; the IEA finds a CO2 price of 50 USD per tonne would make about 280 bcm-equivalent competitive with natural gas.
Sources
- Q4 2025 Earnings Presentation BW LPG, 2026
- India faces LPG supply crisis despite VLGC transits through Hormuz Riviera Maritime Media, 2026
- Mobile Pipeline X-STORE ADR gas modules datasheet Hexagon Agility, 2025
- Outlook for Biogas and Biomethane: A global geospatial assessment (WEO special report, revised May 2025) IEA, 2025
- 2006 IPCC Guidelines for National Greenhouse Gas Inventories, Vol. 2, Ch. 1, Table 1.2 (default net calorific values: LPG 47.3, natural gas 48.0 TJ per Gg) IPCC, 2006
- LPG trade growth will be curbed in 2025 due to US terminal capacity limitations Drewry, 2025