EDITORIAL 

                                                                                                         


"Creating conditions for greater use of gas as motor fuel is one of the principles of state policy on gas supply in Russia" 

     (Chapter 2, Article 4 of the Federal Law «On Gas Supply in Russia» № 69-Federal Law, enacted on  31 . 03. 1999)

 
                    The 7th anniversary of the birth of the journal «AGZK + AT"

 Seven years ago, our magazine «AGZK + AT» was born. It is both “a lot” and “not too much” at the sane time. For full information support for the development of the NGV industry –it is not much. But this is already quite enough time to draw some conclusions.

Today NGV industry is developing in two directions, based on different engine fuel. This is a propane-butane mixture (liquefied petroleum gas - LPG) and natural gas - methane (compressed natural gas - CNG and liquefied natural gas - LNG). The development of these areas goes in different ways. By virtue of the fact that LPG - is largely a product of oil refining, it does not depend on “natural monopoly “  - «Gazprom» company, and LPG equipment is much more  cheaper than  for CNG and LNG.  The possibilities to work with LPG are much higher than with CNG and LNG. Due to a number of factors: institutional, economic and even those of political nature, the use of liquefied petroleum gas as motor fuel (GMF) in Russia has received the widest circulation. You can say it is dominant today.

 

At the end of the year there are more than 4 thousand gas refueling stations (including multifuel and mobile stations) in Russia. In the stage of design and construction there are still more than 800 objects of gas refueling for transport. There is a growing number of modern technical service installations which provide maintenance for gas-cylinder equipment and repair services for  gas-motor cars. At the country's roads more than 400 thousand (only registered) vehicles using LPG can be found. The fuel also is used in stationary engines for different purposes.
Private industry makes extensive use of the possibility of free participation in the development of gas motor industry on the basis of LPG.

Another direction of this development is the use of compressed natural gas. Here we can see another picture mainly due to a complete monopoly of «Gazprom» company. Since 1990 and till today it owns 221 CNG stations which are of the Soviet make. During the years of the “new Russia” added only several small stations and 17 private CNG stations. Today only 95 thousand cars are working on CNG fuel.  This number is so small for such a big country that it can be compared with a « water drop in the Ocean».

In 2007 «Gazprom» has adopted an industry branch (ie, Gazprom's) program of development of gas fueling network. In statements to the media and at various meetings of senior officials of «Gazprom» it was openly declared that in this program, private investors, who are not related to the «Gazprom», are not allowed to participate/  They are given only the opportunity to participate in the tenders for the right to supply certain equipments to  «Gazprom» and nothing  more. The owner of the newly constructed CNG remains the same – it is «Gazprom» company.  Under the program mentioned above, «Gazprom», by the end of 2015 will build on the territory of Russia as much as 200 new CNG stations!  At average it is 13.3 CNG stations per year. And all this is for the whole huge territory of Russia!

 

Why Russia's businessmen can not help in the development of NGV market? Why not to allow private owners to participate in the construction of CNG stations and in use of natural gas for gas motor purposes? Because the number of existing CNG then will increase considerably! The answer is simple: they can and want this participation, but the «Gazprom» company does not want it at all.

The Chairman of the Board of “Gazprom”, A.B Miller said: «Gazprom» offers its European partners to explore jointly a large-scale project to create a network of automobile gas filling stations in Europe ». With Europeans «Gazprom» is quite prepared to work because it is profitable. But working with its own people – with Russians “No, thank you, we won’t ...”

NGV industry - is an inexhaustible source of financing for social programs and for budgetary savings. Only LPG filling stations in 2007 gave to the national budget 1.7 billion rubles as taxes. And how much money gave to the state budget many other sites of the NGV industry! How many jobs were created! Each municipal transportation fleet if converted for motor gas fuel can give 50% of the budget savings only due to the difference in fuel cost, 30-40% - due to increased engine life and 50% - due to the increased period of life of the engine oil! At the national scale – it is hundreds of billions of rubles in budgetary savings that can be obtained without any additional investments from the state. To achieve this budgetary effect it is just necessary to give Russian businesses the freedom of access to gas pipeline construction and ownership of CNG stations, to obtain unlimited amount of gas for internal NGV industry at a fixed price. In Argentina, this policy is carried out by direct presidential decrees. Is Russia worse than Argentina?

In the same eight years of the Gazprom program, instead of Gazprom's 200 CNG stations that are promised to be  built,  in Argentina there will be 1800 new additional stations and in  Germany 1000  news CNG stations. And there will be even more stations if the State in these countries adds some additional benefits for installation of new gas refueling stations.  There is a good example of the USA tax credits and other benefits in this respect.

Today we can confidently say that the NGV industry in Russia and the market for gas fuel has formed and is developing. Liquefied petroleum gas and natural gas will be the most environmentally and economically viable as an engine fuel in the coming decades. The World Gas Union predicts that by 2030, the number

world fleet, operating on GMT, will increase up to 100-200 million units. All the world's automakers are beginning mass production of vehicles using GMT. Rail, water, air, agricultural vehicles are beginning to use GMT.

In Russia there is an urgent need for actions to develop NGV market by accelerated methods, particularly given the conditions of the financial market crisis which has recently occurred - now we must look for ways to maximize budgetary savings. Today, in Russia only 95 thousand cars per year work on natural gas, methane, consuming 310 million cubic meters of gas. One cubic meter of gas is an equivalent to one liter of gasoline. One liter of gas in Russia costs at average 7 rubles. A liter of gasoline –costs 24 rubles. Consequently, the savings amount to 17 rubles per liter, and for 95 thousand NGV cars it is 5,7 billion rubles in fuel savings. If the government really will undertake conversion of its public transport, as well as agricultural machines and stationary power units for gas engine fuel, than the volume of the whole transportation fuel which is to be paid from the budget could increase about five times (it means that the number of such vehicles and stationary machinery n\may be raised up to 500 thousand units). If the number of public transportation units remains the same than the budgetary savings will amount to 26.33 billion rubles. And this is only a small part of opportunities. Well-written and implemented at the governmental level, the program, the implementation of which will be tightly controlled by the State, will annually generate hundreds of billions of rubles of profits and savings in the State budget. The State is required only strong support in the form of decrees, governmental orders to the officials of all ranks to strictly implement these governmental decisions. 

Today there is a need to strengthen and support the development of the NGV industry and NGV fuel market, which in one way or another, but has already formed. To achieve  this it is necessary to do as follows:

• Adopt a Federal law that regulates relations in the production and use of natural gas as motor fuel, and enable a free access to these for the private firms and entrepreneurs, independent of  Open Joint Stock Society  «Gazprom»;

• Establish or revise the existing legal framework in the use of gas fuel taking into account the experience of advanced countries in this sphere: Argentina, Brazil and others;

• Oblige the budget ( Federal and municipal) organization within a specified period to converse municipal transport to motor gas fuel. The costs of such a conversion  will be covered by the difference in the costs of NGV and traditional petroleum fuels;

• Oblige producers of the internal combustion engines for  automobiles and tractors, water and air transport, and stationary power units to produce also engines working on gas engine fuel in  a certain proportional of both products – gas and liquid fuelled engines-  and to ensure the strict control of the implementation of this scheme of proportional production;

• Enhance the participation of government agencies, academic institutions and industrial enterprises in the development of the NGV industry;

•In view of  the fact that the NGV industry is expanding and has an opportunity to be a budget-money generating branch of the Russian industry, it is necessary to legally adopt it in the official lists of Russian Statistical Agency and of the Ministry of Energy/ It is also necessary  to create an interagency working group to develop appropriate status of NGV industry related Acts, documents and regulations;

•It is necessary to improve the effectiveness of the Commission on the use of natural and liquefied petroleum gas as motor fuel;

•It is necessary to take appropriate decisions on the introduction of the profile subjects for the training of specialists in all areas of the NGV industry (also in use of NGV fuel)  into intermediate and higher educational institutions

• For the mass  transition from petroleum fuels to gas fuels it is necessary to hold at the State level an active PR campaign and promote the ideas of such a transition in the media, at conferences, exhibitions and other large-scale events.

Dear readers, distinguished Statesmen who read our magazine, let the forthcoming New  Year 2009  be successful  for you in business, in decision-making in favor of the our Russian State!  Happiness and health to you!

               Virtual  gas  pipelines - an effective way of transporting natural gas



                                                Vaclav Hrz, Ph.D., Chart Ferox, AS .  Czech Republic


Technological development in the field of liquefied natural gas (LNG) creates new opportunities for transportation of large quantities of natural gas. Liquefaction of gas in large quantities allows intercontinental transportation to the large coastal storage facilities. These kind of terminals have been operating for more than forty years. Mostly gas from these LNG storage terminals goes further by the pipelines.  But recently it has become popular to deliver liquid natural gas directly to end users.

Having started in the United States in the twentieth century, this method has been developed recently in many countries. Road, rail and river transport, make it possible to transport a surprisingly large number of natural gas. It can be cost-effectively implemented with the assistance of road trailers, railway wagons or intermodal freight ISO containers.

                           Vladimir Nadein, General Director of JointStock Company  «NSA-Energodiagnostika


In technological scheme of the exploitation of the deposit of one of the important indicator is the rate of extraction of hydrocarbons. We call it  CEO, i.e - coefficient of extraction of oil, but the more oil is produced, the more oil passing (associated) gas (OPG) is extracted, which is always there in an oil deposit being there  in a dissolved state.

In 2007, President VV Putin has set a goal - by 2011 to raise the level of utilization of passing petroleum gas up to 95%. Can this task be solved? Yes, it is feasible, because there are many technologies that enable to collect the associated petroleum gas at large and small oil fields. But to achieve the goal, it is necessary to begin to understand how OPG is extracted during oil production.

 Putin outlined the approximate number of OPG losses - 20 billion cubic meters per annum. However, anyone who is at least superficially acquainted with the problem, could not fail to notice how different these data various specialists present in their papers:  20, and 40 and even 50 billion m3. Why does such a huge spread exist? The answer is quite obvious: no one thoroughly has measured the volume of wasted passing gas set free by extraction of oil. So how much in reality gas money is just burned and than flies out the chimney – this figure nobody knows. Besides this gas is not only burned in vain but this process is extremely harmful to the environment.  If we take into account that one thousand cubic meters of associated gas is worth $ 400, then even the official 20 billion cubic meters will give an impressive $ 8 billion loss! Meanwhile, today there are all conditions to ensure that associated gas goes to the state budget. Moreover, in some cases this gas is even better than oil . After all, what is the associated gas? Propane-butane plus methane. That is, a mix made ready by nature, which «Surgutneftegaz», for example, sends as fuel at the Surgut thermo-electrical station. I think the state will find a way to make subsoil users to collect this priceless commodity.

                                          A U T O G A S      E V E N T S    I N     R U S S I A   -   2 0 0 9

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       and  Business    Forum                                         "Gas Distribution and Consumption"                     Exhibition  and  Business  Forum

                                                                                                                                                 " Oil and Gas Industry in the     
" The World of Liquified and                         26-29 May, Sanct-Petersberg  2009                      Southern Federal District of 

   Compressed Gases' 2009"                                                                                                                      Russia"

          10-12 June, Kiev, Ukraine                                                                                                        9-12, October, 2009, Sochi
                                                                                                                                                                                                                                           
          

                                                                 The Industry Main Event of  2009

                                           The 16th International Exhibition and Forum in Moscow on 28-30, October, 2009

       22nd World LP GAS FORUM 

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