Alexey Miller, Chairman of the Gazprom Management Committee moderated a meeting on boosting the use of natural gas as a vehicle fuel.

Opening the meeting Alexey Miller said: “The time has come for a breakthrough in the Russian natural gas vehicle (NGV) market and Gazprom is the only domestic company that can do it. Our main goal is to expand the sales market of this type of fuel to the extent possible to serve the public interests. Gas is the most eco-friendly fuel. It is also the cheapest fuel. Gazprom is capable of strongly expanding the existing infrastructure, making it more attractive for car drivers, supplying as much gas as possible and actually creating a new great sales market for the Company's natural gas. This is a profitable core business for us.”

The meeting participants discussed the status of the global and domestic NGV fuel markets as well as Gazprom's experience gained in this sector. It was highlighted that the NGV market expansion would help significantly reduce atmospheric emissions which was especially significant for big cities. Besides, natural gas is considerably cheaper than gasoline and that raises cost efficiency of vehicle transportation.

The meeting paid special attention to new approaches that may be applied in Gazprom's NGV business. Consideration will be given to the expediency of setting up an operating company to deal with a turnkey project.

Based on the meeting results, an assignment was given to promptly submit proposals on developing a business scheme that would enable Gazprom to greatly boost the sales of natural gas as a vehicle fuel.

Background

The Russian NGV fleet amounts to some 86 thousand units (global fleet is comprised by more than 15 million units). At present, 242 compressed natural gas (CNG) filling stations (207 of them are owned by Gazprom) are operating in 58 regions of the Russian Federation. Besides, a new CNG filling station is currently being built in the Kaliningrad Oblast.

361.6 million cubic meters of compressed natural gas were sold by Russian CNG filling stations in 2011, which was 16.6 million cubic meters more than in 2010.

Based on the 2011 results, the most developed regional markets are the Stavropol and Krasnodar Krais, the Sverdlovsk, Chelyabinsk, Rostov and Tula Oblasts, the Republic of Bashkortostan with 52.1 per cent of the total volume of compressed natural gas sold in Russia.

Gazprom signed Agreements of Cooperation with the Kaluga, Orel and Penza Oblasts on natural gas use as a vehicle fuel. Moscow, the Stavropol Krai, the Sverdlovsk, Tambov, Kaluga, Saratov Oblasts as well as the Republic of Tatarstan endorsed the regional laws aimed at developing local CNG markets.

At the moment, gas filling capacities are being promoted in the regions of Eastern Siberia and the Far East. CNG filling stations have already been built in Bratsk. A methane filling station is being designed in Petropavlovsk-Kamchatsky. In the nearest future CNG filling stations will be built in Khabarovsk, Blagoveshchensk, Vladivostok and Yuzhno-Sakhalinsk.