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Blue Corridor - 2017: development of LNG in transport

LNG: a three-way conversation

Participants of the unusual rally "Blue Corridor-2017", Denis Vorobyev (Gazprom gas-powered fuel), Evgeny Pronin (Gazprom export) and Detlef Wessling (Uniper) talk about the development of transport on natural gas, in Europe and Russia.

The Blue Corridor - 2017 is taking place in Europe, rallying on cars that run on natural gas. It started in Lisbon on September 18, will end on October 5 in St. Petersburg. On September 22, the Gazprom and Uniper team arrived in Milan, where the Lombardy regional government hosted a seminar on the use of gas in transport, especially heavy trucks, because they are now "responsible" for more than a quarter of carbon dioxide pollution and harmful emissions in Europe. Putting them all on natural gas, Europe would have significantly improve its ecology, and would have cut costs (in fact, methane is cheaper than even diesel fuel).

 Seminar participants

Seminar participants, photo © Evgeny Utkin

After the seminar, we met with the participants of the seminar and the Blue Corridor rally 2017 to talk about the prospects of gas in transport. The conversation was attended by Denis Vorobyev, Deputy General Director in Work with Government Authorities and Implementation of Foreign Projects in Gazprom Gas-Neutral Fuel Company, chief expert of Gazprom Export Evgeny Pronin and Gazprom's long-time partner, the head of technical cooperation and gas supplies of Uniper, Detlef Wessling.

Denis Vorobyov (left), Detlef Vessling (center) and Yevgeny Pronin (right)

Denis Vorobyov (left), Detlef Vessling (center) and Evgeny Pronin (right), photo © Evgeny Utkin

- Three years ago you were in Milan with a similar rally, in 2014. Let's talk about the prospects for the car development on gas. How is it now in the world, in Europe since then?

E.P. - This industry is developing at a much faster pace. For example, in Europe in 2014 there were 1.2 million gas vehicles, on methane, and basically it was CNG (compressed natural gas), but now their fleet has grown to 1.6-1.7 million. It is 30% of the increase. Sales volume - now we can talk about 30 billion cubic meters of gas in the world and, in particular, 6 billion in Europe, and this is the CNG and LNG (liquefied natural gas). In the LNG segment, growth is the most significant, primarily because automakers began to present their cars on LNG, for example, IVECO began manufacturing the Stralis 400 NP, 400 hp, which can drive up to 1,500 km without refueling.

- And where is LNG most developed, in which countries?

E.P. - Not bad the network in Spain is developing now, there are more than 20 stations, in Portugal there are at least 5 stations of LNG, here in Italy, 14 new stations have been opened since the beginning of the year. By the way, Italy is the leader in Europe. Here they consume more than 900 million cubic meters of gas. In addition to trucks, and passenger models appear, and in our rally are also involved such cars.

 IVECO began manufacturing the Stralis 400 NP, 400 hp, which can drive up to 1,500 km without refueling

IVECO began manufacturing the Stralis 400 NP, 400 hp, which can drive up to 1,500 km without refueling, photo © Evgeny Utkin

- And why is everyone talking about the development of electric vehicles, and no one about gas? Why there is a boom, but are you calm?

E.P. - I have been working in this sector for 25 years, and I will say that I do not know. And no one knows, otherwise they would have found a way to eliminate this sore. There are a lot of reasons, in fact. Legislative, and logistical, and price. For example, IVECO sells its diesel cars for 85 thousand euros, and gas - for 125 thousand, i.е. 40 thousand of a difference.

In the conversation comes Detlef Wessling:

- That's why I said at the conference that you need to consolidate the price for customers of LNG for 4-5 years, just in 4 years they will pay off the difference in the price of the car, because LNG is cheaper by 30% than diesel fuel.

E.P. (continues) - For example, in Spain one company told us that they bought 5 cars, and they had a bonus of 15 thousand euros each. But then appeared that there is no more money.

- Well, yes, in Italy there was the same situation. Bonuses were given, but the money ran out, and immediately growth slowed. And how is it in Russia?

D.V. - In Russia, growth in volume of 33% since 2014, now it is 560 million cubic meters of gas, and in 2014 was 406 million. Then there were 109 thousand cars, now about 150 thousand. During this period, we built 36 stationary stations and 88 mobile car gas stations. Here we are in Marseille refueled, there is a barrel on the wheels, this is MCGS (mobile car gas station).

D.W. - We have such, too, MCGS, but by law, you can have it olny for a year, and then you need to build a stationary one.

D.V. - And thus, we now have more than 300 gas stations, and with MCGS there will be more than 400 of them. For this year we have a plan for 25 new stationary facilities. Then we have two points in Russia for the production and refueling of LNG.

E.P. - I will add that last year in Russia we finally reached the volume of gas consumption for cars (about 500 million cubic meters), which it was in the RSFSR at the time of the collapse of the USSR, i.е. in 1991. Now the situation is positive, because we managed to ensure progress at the legislative level, at the governmental level.

D.V. - There is President assignment, there are at least two state programs, where all this is stated as goals, the third state program is on our way out. Every year, at least, but 3 billion rubles subsidies for the purchase of gas vehicles are allocated. And the market is open. The subsidy is given to the car manufacturer who sold the car.

 Gazprom's LNG station in Germany

Gazprom's LNG station in Germany, photo © Gazprom.ru

- Do you compete electromobiles?

All at once started talking, it is audible only, "looking where, in what niche", then Denis Vorobyov talks:

- It seems to me that the level of education in the society is falling, people have become poorly versed in physics. And most simply do not understand that electricity is not taken from the outlet. In order to develop the necessary amount of electricity for the car, it is necessary to burn much more of the same gas to the power plant. People do not see it or do not want to see it. Therefore, there is an active advertising of electric transport. And if you look at the whole cycle of energy conversion from a well to an outlet, it will be clear that electric transport is environmentally dirtiest. It is incomparably dirtier.

E.P. - Grants, grants, subsidies, here you can weld good money ...

D.V. - In the segment of passenger transport - competitors, especially in the city. In the cargo segment - I doubt very much. There was also a conference in Berlin in February - and everyone there unanimously said that the alternative to diesel in freight transport is just LNG.

- What about hydrogen?

E.P. - If hydrogen, then we will receive it anyway from methane. And it is now 10 times more expensive than gasoline. If with equal competition ...

D.V. - Then we'll put them all on the shoulder blades. Our competitor is propane now.

- It is leaving?

E.P. - No - this is a good right fuel, especially for cars. And electricity must be produced. But today on an ecological wave the topic of electricity is profitable. And where and how it appears in the outlet, no one talks. How much did we burn gas to get it? Quite accurately, today's lobbying for electricity is largely ahead of the lobbying of methane.

D.W. - No, these are all our "green". They are fans - Detlef even blushed and started to wave his arms like an Italian - they do not understand what they are doing. It's like sectarians, it's impossible to talk seriously with them, everyone has one answer - ecology.

- I saw in Europe a lot of city buses on gas, and now there are electric ...

E.P. - I saw several hybrid buses in Madrid, they are methane hybrids, but most of buses are on methane, using CNG, more than 600 pieces, and this program has been going on for a long time. There is a huge number of buses in Lisbon. Today there are a lot of gas buses in Europe (mainly on CNG).

 Today in Europe there are many gas buses

Today in Europe there are many gas buses, photo © Gazprom.ru

- And when will the golden age of gas come to transport?

E.P. - When the LNG market reaches 20%, it will be very good. Why 20%? Because there will be gasoline, diesel fuel, propane will not go anywhere, electricity ... Because 20% of the market is a good goal to go to. CNG, LNG and, my dream, gas hydrates ("methane ice"). And it will come, I hope, during my life, or, so as not to tie to it, in 10-20 years.

Evgeny Utkin, Italy, Milan