Page 12 - FSUOGM Week 17 2021

FSUOGM PROJECTS & COMPANIES FSUOGM

Gazprom eyes franchise deals to

develop CNG motor fuel market

RUSSIA GAZPROM Gazomotornoye Toplivo, a subsid- (COVID-19) pandemic.
iary of Russia’s state-owned Gazprom, plans to Russia is looking to expand the use of gas
Gazprom is finalising open its first franchise-run compressed natural as a vehicle fuel, in order to monetise more of
contrats with three gas (CNG) filling stations this summer, Vedo- its gas reserves, especially in remote areas, and
partners for the mosti reported on April 22 citing sources. reduce pollution levels in major cities. Gas is also
facilities. Gazprom is finalising contracts with three cheaper compared to gasoline and diesel, with
partners for the facilities, which will be opened its use cutting fuel costs by 45-50%, according to
in the regions of Tatarstan and Krasnodar, Russia’s Independent Fuel Union (IFU).
according to the newspaper. The company plans The government has rolled out a number of
to launch at least seven franchise stations by subsidies over the past year, including cover-
the end of the year, including in other areas of ing most of the cost for motorists of convert-
Russia. The franchisees will pay RUB300,000 ing their vehicles to run on gas. A five-year
($4,000) per year to Gazprom to operate under state programme was launched in 2020 worth
its brand, while also transferring 7% of revenues RUB19.3bn, which will cover 60% of the con-
from the facilities. version cost, while Gazprom has offered to pay
Gazprom confirmed the franchise plan to a further 30%.
Vedomosti without disclosing details. Its Gazo- The government forecasts that demand for
motornoye Toplivo division already runs a net- CNG and LPG will reach 2.7 bcm per year within
work of 294 CNG filling stations, having opened five years, while the number of gas-fuelled cars
130 facilities in the past five years, or just under on the road will expand to 200,000, compared
30 annually. It plans an aggressive expansion in with 155,000 last year. The number of CNG fill-
the next two years, however, adding a further 200 ing stations is anticipated to reach over 1,270.
CNG stations. It will offer franchise deals to help The main thing impeding the sector’s devel-
realise this ambition. opment is a lack of CNG refuelling infrastruc-
Russia has a total of around 550 CNG sta- ture, according to IFU. But interest among
tions in operation, including 200 that are owned private investors is growing, and Gazprom wants
by independent operators. Consumption of to harness that with its franchise plan. Vygon
gas as a motor fuel, including both CNG and Consulting estimates that it costs RUB160mn on
liquefied petroleum gas (LPG), increased 10% average to build a CNG filling station, although
last year to 1.1 bcm, despite an overall decline the state has agreed to cover RUB40mn of the
in fuel demand as a result of the coronavirus expense. ™

P12 www. NEWSBASE .com Week 17 28•April•2021