Russian NGV market development

Vasiliy Zinin

NATURAL GAS VEHICLE ASSOCIATION (RUSSIA)

INFLUENCE ON FUEL TECHNOLOGIES DEVELOPMENT

Increased efficiency of the engine and transition to Euro-6

CNG and LNG

Hydrogen

E-vehicles

Biofuel

High oil prices

Limited oil resources

Drivers

Ecology

Accessibility

Technology replication

CARBON FOOTPRINT IN THE PRODUCTION OF MOTOR FUELS

UpstreamDownstreamCNG FS

0,01 t0,01 t 0,202 t0,202 t 0,03 t0,03 t

0,24 t/toe0,24 t/toe

ProductionProcessing (gasoline)

0,96 t/toe0,96 t/toe0,0006 t0,0006 t 0,96 t0,96 t

Transportation (gas pipes, rail transport)

0,0002 t0,0002 t

Gasoline

Compressed Natural Gas (CNG)

Greenhouse gas emissions by the

production of gasoline4 times more,

than for the life-cycle of CNG

AIR POLLUTANT EMISSIONS FROM VARIOUS FORMS OF TRANSPORT

Source: the Flemish Institute of Technological Research Source: Volkswagen Group

CO2 emissions (Volkswagen Golf with variable speed drives as an example)

Gasoline engine

Hybrid engine

Gas engine (propane-butane)

Gas engine (methane)

Electric motor

Fuel cells (Hydrogen from water by Electrolyze)

Fuel cells (Hydrogen from natural gas)

* The problem of accumulators utilization

1146 g/km

1136 g/km

127 g/km

88 g/km

276 g/km

110 g/km

CO HC NOx PM SOx Pb Gasoline engine

Gas engine CNG

TRUCKS

BUSES

CO HC NOx PM SOx Pb Gasoline engine

Gas engine CNG

1

kg/t

1167 g/km kg/t

t

NATURAL GAS ROLE IN LOW CARBON DEVELOPMENT

В интересах устойчивого развития

PM

CO2

CO

NOx HYDROGEN

NATURAL GAS

«0» emissions

CO2 CONOx

SO2

«0» emissions

МHM

PMSO2

«0» emissions

METHANE-HYDROGEN MIXTURE

Further decrease

NATURAL GAS – BASIC ELEMENT OF TRANSITION PERIOD TO LOW CARBON

DEVELOPMENT

EXISTING GAS POWER GENERATION INFRASTRUCTURE AND EQUIPMENT UTILIZATION (with less constructive changes)

- Fuel gas for power generation units- Gas for transport (fuel)

Hydrogen production from methane with zero CO2

emissions

CARBON (valuable material)

Cheaper and more efficient than electrolysis

Natural gas increases efficiency of hydrogen technology

PRICES FOR FUEL ON RUSSIAN MARKET

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

DieselGasoline

LPG

CNGPipeline gas

USD

67%

72%

There are pricing incentives for consumers and producers to enter Russian NGV market

REQUIREMENTS FOR GAS FILLING INFRASTRUCTURE IN THE RUSSIAN FEDERATION

Network – to solve the problem of covering areas (city, region) when access to refueling for any customer

Point – to create infrastructure for client`s needs within a specific asset (depot, port, quarry, etc.)

Trunk – to solve the problem of covering the main highways

Infrastructure Development Models:

Railway transport

Aviation

Outland water transport

Inland water transport

Long-haul vehicles

Agricultural vehicles

Municipal fleet

Special vehiclesQuarry vehicles

Regional freight operations

LNG

CNG

Taxi

334 41

20

23

13

14

84

Passenger vehicle

Market segment

Type of fuel

Model of infrastructure development

Number of fueling stations required

Expected additional investments in creating minimum infrastructure

724

3,4 BLN USD

1 253

REGIONAL PRIORITIES FOR NGV MARKET DEVELOPMENT

М11

М10

М7М4

М1

M-10 «Russia»

M-11 «Moscow – Saint Petersburg» M-4 «Don»M-1 «Belarus»M-7 «Volga»MTM «Europe – Western China»

MOST ACTIVE REGIONS15

HIGHWAY PROJECTS6123456

123 45 6789

101112131415

Krasnodar Region

Volgograd Region

Saint Petersburg

Saint Petersburg Region

Moscow

Moscow Region

Samara Region

Nizhny Novgorod Region

Bashkortostan

Omsk Region

Tomsk Region

Novosibirsk Region

Altay Region

Perm Region

Sverdlovsk Region

2

МТМ

PILOT REGIONS

Rostow regionBelgorod region

12

CURRENT PRODUCTION AND DISTRIBUTION INFRASTRUCTURE OF

GAZPROM GAS-ENGINE FUEL

405 294Gas-filling stations in Russia

Assetsowned by Gazprom PJSC

(73%)

CNG NETWORK

ENGINE FUEL MARKET IN RUSSIA

49,947,3

2,1 0,7

Gas Diesel LPG CNG

• Light motor vehicles – 29.9 million tons (46.7%)• Trucks and specialized vehicles – 21.6 million tons (33.7%) • Light commercial vehicles – 9.3 million tons of fuel (14.5%)• Buses – 3.1 million tons (4.8%)• Motorcycles – 0.1 million tons (0.3%)

Consumption of motor fuels by vehicles in Russia*, %

CNG

2018

Transport segments working on compressednatural gas:

Transport segments working on liquefiednatural gas:

• long-distance haul motor transport;• railway transport;• water transport;• quarry vehicles; • agricultural vehicles

• light motor vehicles;• commercial transport;• light-duty trucks;• municipal vehicles.

% %

%

%

LNG

* According to Avtostat analytical agency

GROWTH OF NATURAL GAS VEHICLES FLEET

In order to achieve the self-sustainability effect at the gas-engine fuel market the annual gas-engine fuel vehicles fleet growth should be 50,000 units

FLEET EXPANSION OF GAS-ENGINE FUEL VEHICLES IN RUSSIA

2014

131 000

163 000

2019*

+32 000

5 586

8 811The number of gas-engine fuel powered vehicles sold within the framework of the federal grants allocation in 2014-2017

Number of equipment purchased by Gazprom within the framework of its own program in 2014-2017

Number of gas-engine fuel vehicles sold by Russian motor manufacturers in 2014-2017

14 079

MINISTRY OF INDUSTRY AND TRADE OF RUSSIA

*expected

GOVERNMENTAL PROGRAM FOR NGV MARKET DEVELOPMENT

10 BILLION RUB. 10 BILLION RUB. 10 BILLION RUB. 10 BILLION RUB.3,5 BILLION RUB.

2019 2020 2021 2022 2023 2024

INCREASE IN SUBSIDIES

10 BILLION RUB.

50 Mn USD 150 Mn USD 150 Mn USD 150 Mn USD 150 Mn USD 150 Mn USD

20-25 Regions are to be chosen

30% of CAPEX for filling stations

30% of Retrofit cost

Standardization

Popularization

Rule-making Expertise

Communication

Monitoring

www.ngvrus.ru

Thank you for your attention!

Natural Gas Vehicles Association

St Petersburg, Kirochnaya, 64web@ngvrus.ru