NGV Market in Russia. Today and Tomorrow
EBC Ecology and Healthcare Working Committee Meeting, September
In 2001 the European Commission adopted the White Paper, European
Transport Policy for 2010: Time to Decide.  The document contains
development guidelines for various types of transport in Europe. The European
Union energy saving policy is described in the Green Paper.  One of the
objectives the Green Paper sets forth for 2020 is to transfer 20% of automobile
transport to alternative fuels.
It is worthy of note than the White Paper envisaged a wide scale use of bio-
fuels in the short-term, natural gas was projected for the medium-term while
hydrogen fuel was regarded as a long-term prospect.
The new transport policy adopted by the European Commission in 2009
largely focuses on fuels produced from renewable energy sources. The new
transport policy has been set out in a comprehensive study on transport
development towards 2050 – TRANSvisions.  This major research paper
describes five transport development scenarios. The high case envisages a 20.4%
share of alternative fuels from renewable energy sources by 2020. As for
traditional fuels, close attention is given to the reduction of carbon dioxide
The reserves of natural gas considerably exceed oil reserves. The most
widely used source of data on the world oil reserves - British Petroleum Statistical
Review of World Energy, 2009  - cites the following data. The world has
enough oil reserves to last for 42 years, while gas reserves are sufficient for 60
years. Russia is currently developing new gas fields in the Yamal Peninsula, with
forecasted annual production of 300 BCM of natural gas . This is almost double
the volumes that Russia is currently selling to Europe.
Now, nearly ten years after the White Paper adoption, the gas engine sector
is developing rapidly in Europe. New fuel efficient methane light vehicles came
into being and major manufacturers of freight carriers launched serial production
of natural gas powered vehicles.
Sector Structure in Russia and Europe
Russia and Europe are experiencing a major growth in the number of gas
Figure 1 NGV Growth in Europe
3 000 000
2 500 000
2 000 000 1853039
1 500 000 1317205
1174940 1185176 1185221
1 000 000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: NGVA Europe, 2009 
Figure 2 NGV Growth in Russia
100 000 95000
20500 20500 20500 20500 20500
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Italy is the European leader in the number of gas powered automobiles, with
523 thousand gas powered vehicles. Russia comes third with 103 thousand GPA.
Figure 2 NGV Numbers in Russia and Europe
Italy 523 100
Germany 76 747
Russia 61 000
Bulgaria 60 226
Sweden 16 900
France 12 450
Switzerland 7 062
Austria 4 041
Spain 1 820
Czech Republic 1 278
Poland 1 200
Netherlands 1 110
United Kingdom 221
1 10 100 1 000 10 000 100 000 1 000 000
Source: NGVA Europe, 2009 
Developing the fleet of natural gas vehicles requires an infrastructure of
NGV-filling compressor stations (Refueling stations). The average gas supply
coverage in Russia is 62% and one of the major tasks Gazprom is facing at this
time is gasification of East Siberia and the Far East. The development of gas
transportation network will help expand the structure of refueling stations. Russia
currently comes third in terms of the refueling station numbers.
Figure 3 NGVCS in Russia and Europe
Czech Republic 35
United Kingdom 14
0 100 200 300 400 500 600 700 800 900
Source: NGVA Europe, 2009 
Many European countries have introduced incentives for small-sized and
medium-sized businesses, as well as for private vehicle owners to transfer to
natural gas vehicles. The incentives include restrictions on the use of hydrocarbon
motor fuels except for municipal buses and refuse collection vehicles (France);
granting priority rights for municipal contracts to companies using compressed
natural gas (France, Italy); allocating grants and subsidies for purchase of natural
gas vehicles and gas bottles (Australia, the UK) etc. .
Russian Sector Overview
The Russian Federation Transport Strategy until 2030 approved in 2008 
contains sections on alternative fuels transport development: “Reducing the
harmful impact of transport on the environment and ensuing damage requires:
- promoting the use of transportation vehicles powered by alternative fuels
Speaking of government actions to support the gas motor sector, one should
specially mention the RF Government Resolution ‘On Immediate Measures to
Promote Replacement of Motor Fuels by Natural Gas’ of January 15, 1993 No 31
. The Resolution sets a cap on the natural gas price - not exceeding 50% of the
price for grade А-76 gasoline. The step offers a major incentive to transfer vehicles
to natural gas. Based on the operational practice of private transportation
companies dealing in passenger traffic, the payback period of new gas powered
buses is less than one year. Companies save millions of rubles on fuel annually.
The draft Federal Law ‘On Alternative Fuels’ has been introduced for
review to the State Duma. Adoption of the law would entail multiple benefits for
the whole sector.
The Russian National Gas Vehicle Association is an affiliated organization
of the International Gas Union (IGU) and a member of the European Business
Congress (EBC). The Association incorporates companies and organizations
dealing in various areas of business:
• Transportation and sale of gas fuels;
• Design, construction, assembly, start-up and operation of gas filling
• Manufacturing gas operating and gas filling equipment;
• Design and manufacturing of bottles and tanks for various types of gas;
• Manufacturing automobiles and buses;
• Retrofitting automobiles for gas operation
as well as non-governmental and public organizations.
Being a major energy company, Gazprom is also playing a significant part in
the process. One of the areas of Gazprom environmental protection activities is the
use of gas an environmentally clean motor fuel . Gazprom is making a
significant contribution to the development of gas powered transport in Russia.
Almost all NGVCS in Russia are owned by Gazprom. In March 2007 Gazprom
approved the Special Comprehensive Program for the Development of Gas Filling
Networks and Natural Gas Powered Equipment for 2007–2015 envisaging:
— Construction of additional 200 NGVCS financed by Gazprom;
— Adding 50.000 natural gas vehicles to the current vehicle fleet;
— Complete gas supply coverage for federal and regional highways.
The official company site carries information about the number of vehicles
that Gazprom transferred to natural gas . In 2007, 444 vehicles were transferred
to gas operation, including Gazprom’s own commercial transport.
Gazprom Board Chairman Alexei Miller speaking at the XXIV World Gas
Congress (October 5–9, 2009, Buenos Aires, Argentina) said: “However, the wide
use of natural gas in this sphere will help free the mankind from toxic emissions of
gasoline and diesel engines without losses, like the losses from withdrawal of
fertile land resources from agricultural use to produce bio-diesel fuel.”
Gas may and should be used in automobile engines as compressed gas or as
synthetic motor fuel. This will make another contribution to ensuring sustainable
Russia is conducting theoretical and applied research in the area of natural
gas use as motor fuel. The leading institute in the area is Gazprom subsidiary
VNIIGAZ. A number of educational and research institutions are involved in
mathematical modeling of the processes occurring in gas powered engines. New
technical methods to improve engine operation are developed in research
Each year private companies and research organizations develop designs for
NGVCS infrastructure. Construction of stationary NGVCS involves significant
costs and many locations do not have main pipelines to tie a gas filling station.
Proposed designs for such locations include mobile fuel stations and modular
container compressed gas filling units.
Special mention should be made of research on the use of liquefied natural
gas (LNG). Tests are underway to improve the technical and economic parameters
of fuel tanks. The increased interest in this research is due to physical properties of
LPG enabling gas transportation and efficient use as motor fuel and political
reasons. The first LPG plant started operation in Sakhalin in February 2009
opening new prospects for natural gas use.
Russia has set up batch production of natural gas vehicles (Open Joint Stock
Company KamAZ, OJSC NefAZ, DVS-ECO LLC., Likinsk Bus LLC., bus
manufacturing plant Skania-Peter LLC.), gas bottle and gas filling equipment,
stationary and mobile compressed gas filling units and bottle certification
equipment. In other words, Russia covers the full cycle from research and
development to commercial production of all the technical facilities required to
support the industry operations.
Information support is handled by industrial periodicals, scientific and
engineering journals and books. Private businesses and non-governmental
organizations are showing increase activity. Annual conferences are held on the
subject of the efficient use of natural gas.
In 2000 V.I. Vernadsky Non-Governmental Ecological Foundation
developed the Blue Corridor Project. The Project focused on the establishment of
heavy transport corridors between Russia and Europe. Natural gas was proposed as
fuel for heavy-truck transport instead of conventional diesel fuel. The Project
included estimates of economic efficiency and demonstrated the environmental
benefits of the natural gas as fuel. The number of refueling stations to support
operation of the corridors was estimated. The Project implementation would
reduce annual fuel costs by 37.1 million euro and cut toxic Economic Commission
for Europe but has come on stream so far.
The Vernadsky Foundation is continuing to progress the Blue Corridor with
particular focus on environmental aspects of using natural gas as motor fuel in
long-distance road haulage.
The forthcoming 2014 Olympic Games in Sochi offer new prospects for
developing the gas vehicle industry in Russia. To improve its gas supply system,
Sochi is planning construction of the gas pipeline Dzubga – Lazarevskoe – Sochi.
The 2 BCM pipeline will have an offshore section of about 160 km. The regional
gasification program is now well underway and may give a good impetus to the
gas vehicle sector development.
Large scale projects have been launched recently involving automobile
freight transportation from East to West. Saving on fuel in long-distance haulage
will offer considerable competitive advantage to transportation companies.
Multiple stakeholders will see a clear manifestation of the benefits from the use of
methane by municipal transportation companies.
Many important issues remain outstanding today in the Russian gas vehicle
industry. There is a long road yet to cover, but the prospects of using gas in
transport are enormous. Russia possesses huge natural gas reserves and sooner or
later gas powered vehicles will become an everyday occurrence.
1) Security of Supplies and Respective Investments. Report by Alexei Miller at
the XXIV World Gas Congress. // Gazprom - [Electronic resource] –
Electronic data – Access: http://gazprom.ru/press/miller/speeches/24WGC/
2) Yamal Megaproject. // Gazprom - [Electronic resource] – Electronic data –
3) On Immediate Measures to Promote Replacement of Motor Fuels by Natural
Gas, RF Government Resolution // Law Library [Electronic resource] –
Electronic data – Access: http://www.pravoteka.ru/pst/725/362422.html
4) A.N. Tokarev. When Will We ‘Rev the Engine?’ Social and Economic
Aspects of Gas Fuel Use / A.N. Tokarev // ECO. – 2008. – No 10. - Pp.
5) The Russian Federation Transport Strategy until 2030. – Approved by the
Russian Federation Government Decree of November 22, 2008 No 1734-r //
Ministry of Transportation - [Electronic resource] – Electronic data –
6) Clean Fuel. // Gazprom- [Electronic resource] – Electronic data – Access:
7) Blue Corridor Project. UNECE 2003. - [Electronic resource]. – Electronic
data. – Access: www.unece.org/ie/pub/blue1.pdf
8) DRIVING WITHOUT PETROLEUM? A Comparative Guide to Biofuels,
Gas-to-Liquids and Coal-to-Liquids as Fuels for Transportation. 2007-
[Electronic resource]. – Electronic data. – Access: http://www.encharter.org/
9) Green Paper: A European strategy for sustainable, competitive and secure
energy. 2006 - [Electronic resource]. – Electronic data. – Access:
10)Mobility scenarios toward a post-carbon society. TRANSvisions Task 2
Quantitative Scenarios. March 2009. - [Electronic resource]. – Electronic
data. – Access:
11)NGVA Europe [Electronic resource]. – Electronic data. – Access:
12)Statistical Review of World Energy 2009. BP. 2009- [Electronic resource]. –
Electronic data. – Access: http://www.bp.com/subsection.do?
13)WHITE PAPER European Transport Policy for 2010: Time to Decide.
[Electronic resource]. – Electronic data. – Access: