Gas use in vehicles
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Gazprom Gazomotornoye Toplivo – a sole operator company focused on expanding the use of natural gas as a vehicle fuel
The production and marketing of compressed and liquefied natural gas as a vehicle fuel rank among Gazprom’s top priorities. Gazprom Gazomotornoye Toplivo, a special-purpose company, was set up as part of the systematic efforts to develop the natural gas vehicle (NGV) market.
Exceptionally economical and eco-friendly
Natural gas is the most economical, eco-friendly and safe type of fuel available today. It is essentially a ready-to-use vehicle fuel, which makes it much cheaper than gasoline and diesel fuel. Moreover, the engines of gas-fueled vehicles comply with the highest emission standards, Euro 5 and Euro 6. According to the Russian Emergencies Ministry’s classification, natural gas belongs to the category of the least dangerous flammable substances.
Two types of natural gas are used as a vehicle fuel: compressed natural gas (CNG) and liquefied natural gas (LNG).
The target market segments for the fuel are as follows:
- CNG – passenger and light cargo transport, motor cars and municipal vehicles;
- LNG – line-haul cars, railway and waterborne transport, quarry machinery and agricultural equipment.
Russian NGV market
The use of natural gas as a vehicle fuel is steadily increasing in Russia.
The Russian NGV market has a considerable capacity for growth, which is facilitated by:
- immense natural gas reserves and a well-developed gas distribution network providing for reliable supplies of gas as a vehicle fuel in the long term;
- introduction of energy-efficient fuels in transport, including via conversion of passenger and municipal vehicles to natural gas in the cities with over 100,000 people;
- growing variety of natural gas-fueled equipment and the expanding gas filling infrastructure;
- low price of natural gas compared to conventional vehicle fuels.
In late 2017, there were upward of 320 operational CNG filling stations in Russia, of which 271 were owned by the Gazprom Group and Gazprom Gazomotornoye Toplivo.
Gazprom’s CNG station
Gazprom sold 525.9 million cubic meters of CNG through its gas filling network in 2017.
Mobile CNG station
NGV infrastructure development
The strategic approach to creating a retail station chain in Russia envisions a rapid expansion of the NGV infrastructure in more than 50 priority regions, as well as the formation of transit NGV corridors.
In 2017, Gazprom built and renovated 23 gas filling units, including the largest CNG station in Russia and Europe with an annual design capacity of 29.8 million cubic meters of gas, which was brought onstream in Moscow.
The Company approved the 2017–2019 Program for the construction of gas filling infrastructure at the industrial sites of Gazprom subsidiaries, with 100 gas compression units to be installed for servicing corporate vehicles.
Work is underway to build an LNG production and utilization infrastructure for the NGV market. In addition, Gazprom approved the 2016–2032 Development Program for small-scale LNG production and use.
Interaction with domestic automakers and carriers
Gazprom Gazomotornoye Toplivo is making efforts to promote the use of natural gas as a vehicle fuel under the EcoGas brand and running marketing programs meant to encourage consumers to convert their vehicles to natural gas. A total of 38 cooperation agreements were inked with domestic automakers and NGV conversion companies, and 812 agreements of intent were signed with municipal and commercial carriers.
A program for the wider use of natural gas as a vehicle fuel by the subsidiaries of Gazprom is also in progress.
Cooperation with Russian authorities
The Gazprom Group actively works with regional authorities to improve the regulatory framework facilitating the development of the domestic NGV market.
State-funded regional programs aimed at fostering the NGV market were approved in 36 constituent entities of the Russian Federation.
Meanwhile, 19 Russian regions repealed or cut down the transportation tax for gas-powered vehicles.
In order to synchronize the procurement of NGVs with the expansion of the gas filling network, cooperation agreements were signed with 53 constituent entities of the Russian Federation.
Foreign NGV markets
The increased use of natural gas in road and waterborne vehicles is a focus area for Gazprom in foreign markets as well.
CNG station in Germany
In Europe, Gazprom carries out NGV-based activities in Germany, the Czech Republic, and Poland through its Gazprom NGV Europe subsidiary, as well as through NIS, which is affiliated with the Gazprom Neft Group and sells CNG in Serbia.
In 2017, Gazprom had 60 CNG stations in European countries, with two stationary cryogenic filling stations operating in Poland. CNG and LNG sales in Europe via the Gazprom Group-owned stations totaled 12.3 million cubic meters that year.
The Gazprom Group also sells CNG at CNG stations based in Armenia, Belarus, and Kyrgyzstan. In 2017, the volume of sales amounted to 35 million cubic meters.
The PVGAZPROM Natural Gas for Vehicles joint venture (Gazprom Gazomotornoye Toplivo – 35.5 per cent, Gazprom EP International B.V. – 35.5 per cent, and PV Gas – 29 per cent), the designated operator for NGV market development in Vietnam, continued to operate in Vietnam throughout 2017.