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Gazprom continues large-scale efforts to develop Russia’s NGV market

The Gazprom Board of Directors took note of the information concerning the Company's efforts aimed at developing the domestic NGV market.

It was noted that Gazprom actively contributed to creating in Russia a necessary environment for a broader use of natural gas as a vehicle fuel. The Company develops the CNG filling network, purchases gas-powered vehicles, collaborates with major motor manufacturers on issues regarding the production of gas-fueled cars, and interacts with authorities on issues regarding the support for the NGV sector.

As of early 2016, there were over 270 CNG stations in operation across Russia, with 209 owned by Gazprom. This year, the Company put into operation 19 new stations, with other 16 stations to be built and 4 stations to be reconstructed by the year's end. Thus, the Company will add 35 more units to its CNG filling network in 2016, bringing their number to 244.

Gas sales at Gazprom's CNG stations have consistently increased, amounting to 436 million cubic meters in 2015, which is 7.3 per cent higher than in 2014. The sales growth rate is expected to exceed 17 per cent in 2016.

Gazprom collaborates with domestic car manufacturers on issues regarding the line expansion and the purchase of gas-fueled cars. Thanks to joint efforts, there is a steady growth in the number of gas-powered vehicles across Russia.

Gazprom Group implements a program for gas conversion of corporate vehicles. The current share of NGVs in the Group's vehicle fleet is 26 per cent. The Company plans to greatly expand that share in the medium term. The program has generated significant economic benefit: Gazprom has saved a total of RUB 1.3 billion over the period from 2014 through October 2016, due to the substitution of liquefied vehicle fuel for gas vehicle fuel.

Gazprom promotes the use of natural gas as a vehicle fuel under the brand name EcoGas and implements marketing programs aimed at motivating consumers to convert their vehicles to run on natural gas.

Gazprom makes efforts aimed at creating the infrastructure to produce and use liquefied natural gas (LNG) as a vehicle fuel. The Company has adopted a program for small-scale LNG production and use. Gazprom continues to cooperate with Russian Railways in the field of a wider use of natural gas in rail transportation.

The Company interacts actively with authorities for the purpose of improving a legal framework to facilitate the domestic NGV market development.

The Gazprom Management Committee was instructed to continue the efforts aimed at developing Russia's NGV market.

Background

The production and sales of natural gas as a vehicle fuel is one of Gazprom's priorities. Gazprom Gazomotornoye Toplivo is a special-purpose company established for ensuring the continuous development of the NGV market.

Natural gas is the most cost-effective, eco-friendly and safest fuel. The average price of one cubic meter of gas for vehicles in Russia is RUB 13. The engines of gas-powered vehicles comply with the highest Euro 5 and Euro 6 standards. According to the classification of the Russian Ministry of Emergency Situations, natural gas belongs to the category of the least dangerous flammable substances.

 

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