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July 10, 2013

Viktor Zubkov: Gazprom ready to design additional CNG filling stations for agricultural sector

Viktor Zubkov, Chairman of the Gazprom Board of Directors held a meeting at the Company’s headquarters to address development prospects for the NGV market within the agricultural sector as well as the gas filling infrastructure.

Taking part in the meeting were Vitaly Markelov, Deputy Chairman of the Gazprom Management Committee, top executives of Gazprom Gazomotornoye Toplivo, representatives from the Ministry of Agriculture and the Energy Ministry of the Russian Federation, power officials from the Republic of Tatarstan, the Krasnodar and Stavropol Territories, the Belgorod, Volgograd, Voronezh, Rostov, Orenburg and Ulyanovsk Regions, manufacturers of agricultural products and equipment, as well as Rosagrolizing, Rosselkhozbank and Gazprombank.

The meeting stressed that Gazprom was taking large-scale systemic measures for advancing the Russian NGV market. The use of natural gas in the Russian economy should become far more widespread due to its advantages.

Russia, being one of the world’s largest grain sowing and grain processing regions, has a unique agricultural potential. The future of the Russian agriculture lies in the use of high-performance and cost-effective technologies. Joint activities aimed at expanding the use of natural gas as a motor fuel will make it possible to increase the competitiveness of Russian foods.

Nowadays, fuel costs make up nearly 20 per cent of agricultural companies’ expenditures. The share of gas in the total volume of utilized fuel does not exceed 1 per cent. Meanwhile, natural gas is much more cost-effective and eco-friendly. Replacing conventional fuel with natural gas may result in reducing the companies’ expenditures for fuel and lubricants by three times, decreasing emissions and, consequently, the level of soil degradation.

The experience of agricultural companies presented at the meeting showed that conversion of trucks and buses to natural gas reduced their operating costs by one third. The payback period for investments in conversion was only 6 to 9 months.

“We are ready to provide the necessary financing to start designing new CNG filling stations in the current year in addition to those we have already planned out. This can be done along grain transportation corridors, near large factories which are ready to purchase gas-fired equipment, as we see,” said Viktor Zubkov.

Gazprom’s goal is to replace 20 per cent of conventional fuel used in the agricultural sector with NGV fuel by 2030. The coordinated actions of all the market players are necessary to unlock the full potential of NGV fuel.

The necessity for further expansion of the CNG filling stations network as well as wider use of mobile gas filling stations with the account of tractor and harvesting equipment specifics was pointed out as an expansionary measure. Proposals were voiced to further develop Russian NGV equipment and create service and repair centers for gas-fired agricultural equipment.

The NGV sector will be largely supported by concessional lending and taxation for the companies using NGV fuel as well as partial subsidy assistance in purchasing NGV equipment.

The meeting resulted in the decision to set up a working group under the Russian Ministry of Agriculture to work out the issues of expanding the use of NGV fuel in the agricultural sector. The initiative of the Russian Ministry of Agriculture to provide subsidies to agricultural companies for purchasing NGV equipment was welcomed.

Besides, in the nearest future the possibility will be worked out to launch pilot projects for large-scale introduction of gas-fired equipment by agricultural companies.




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