Gazprom – Natural Gas for Cleaner European Transport Blue Corridor Rally 2012

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The presentation explains how natural gas is the best alternative fuel. It is clean, safe and quiet, and is proven to be economically viable. The presentation also addresses trends in NGV development, as well as market drivers influencing Gazprom’s European gas for transport strategy. It concludes by emphasizing Gazprom's commitment to NGV development.

Text of Gazprom – Natural Gas for Cleaner European Transport Blue Corridor Rally 2012

  • 1. Gazprom Natural Gas for Cleaner European TransportBlue Corridor Rally 2012David Graebe, GAZPROM Germania / Igor Maynitskiy, Gazprom export

2. So where is the problem? but this is not Europe ?!2 3. this is Europe! Petrol 95Diesel Yearly averages Germany in ct (2012: Jan-July) Source: Statistisches Bundesamt, Germany3 4. and this is Europe (America, Japan, )! 5. Competition of alternative technologies not alltechnologies are equally suited() ?? xx x ()()()?? ? ? ?? x x ?()()()?? ? ? ()xx x x5 6. Our firm believe: natural gas is the best fuel!CleanSafe 25% less CO2- and 75% less Crash-Tests prove that naturalCO-Emissions compared to petrolgas vehicles are as safe as conventional vehicles Practically no particulate matter and nofilters or additives (AdBlue) required Natural gas available longer than oil Use of bio-methane reduces CO2-emissions even furtherQuietProven and economic Natural gas engines significantly Already today many operatorsreduce noise emissions and run trucks and buses on CNGmake 24/7 operations possible Storing natural gas as LNG provides even wider driving range Economically attractive alternative to comply with environmental regulation6 7. NGV development trends CNG Natural gas compressedLNG Natural gas liquefied by to 200 barcooling down to -161 (-137) CEstablished and growing New Proven technology available here and today Targets heavy duty transport Cars, busses & trucks available with new Refuelling infrastructure yet to be developedmodels being added by the car industry More complex supply chain than for CNG Zero or reduced excise duty Zero or reduced excise duty Both CNG and LNG are natural gasand meet EU6 standards at lower cost than competitive technologies7 8. Market drivers influencing Gazproms EuropeanGas for Transport strategy European emissions reduction agendadrives development of alternative fuels:EU-6 (2013/2014) and associatedcosts drives development of CNG andLNG as fuel for cleaner road transport(CO2, NOx, particulate matter) Sulphur Emission Control Areas (SECAfrom 2015 in Baltic and North Sea) andassociated costs drive development ofLNG as bunker fuel opposed to MGOor scrubber-technology (SOx)8 9. Expected market potential of SSLNG in Europebcmbcm100250Anticipated demand - LNG Bunkering Anticipated demand LNG VehiclesDemand projections derived from Gazprom export: World NOC Congress, June 18, 2012, London89 200 191 75 150 5046 100 2523 50 28 24 20 0 020152020 20252030Global consumption, CERAGlobal consumption, Pace GlobalGlobal consumption, CERAEuropean consumption, CERAEuropean consumption, Pace GlobalEuropean consumption, Eurogas European consumption, Pace Global European demand for LNG in NGV and bunkering conservatively expected to reach between 22 and 43 bcm p.a. by 20309 10. Gazprom provides Russian natural gas to Europe:CNG + LNG as fuel for transport OAO Gazprom with 200+ CNG stations in Russia Extension of CNG refuelling infrastructure now starting Russiaalso in remote Russian states Developing production and retail infrastructure to promoteLNG sales as a motor fuel GAZPROM Germania Group extending CNG presence inGermany from 4 to 15 stations until end 2014 and in the CzechRepublic (via VEMEX) from 4 to 15 stations by end 2013 Europefurther CNG stations to follow Gazprom export & GAZPROM Germania developing LNG forEuropean road transport and bunkering for North- and BalticSea10 11. European market clusters in CNG and LNG Light duty vehicles and personal carswith continuing growth in CNG Buses and local distribution will Vyborgcontinue to facilitate CNGKingiseppgrowth, with LNG entering Pskovthe pictureKaliningrad LNG growth facilitatedby international NE-E-Clusterheavy duty transport NW-E-ClusterCNG / LNGCNG/LNGand bunkering SE-E-Cluster CNG/ LNG SW-E-Cluster NGV markets CNG/LNG South StreamSamsun Bunkering marketsLNG Bunkering Mediterranean Sea11 12. Substantial investments required to complete the valuechain Gazprom will not hold back! ProductionSupply Hub storageDistributionFfilling stationsEnd customerLNG LNG LCNGPipeline gas CNGStrategicalliancesM&A growthOrganic project based growth12 13. Any questions?Igor MaynitskiyDavid GraebeGazprom export LLC GAZPROM Germania GmbHHead of LNG Export Head of NGV BusinessDivision DevelopmentEmail: Email:i.maynitskiy@gazprom Source: erdgas mobil13 14. Backup in case needed Source: auto.de14 15. Facts & figuresCNG-stationsNGVs 910 95,000 NGV market Germany CNG price1.07 /kgVAT19% 910 CNG-stations / 95.000 NGVs Energy tax 2018 0,2099 /kg2019 0,4802 /kg NGV market share: 0.21% Natural gas sales: ca. 0.25 bcm in 2011 Main players: E.ON, EWE, VNG, GASAG, Gazprom German government sees possibility to extend share of natural gas as fuel to 2.5 bcm by 2020 Natural gas and bio-methane is part of the Energy concept of the German government (09/2010) Number of CNG stations now again growing Target: 1.000 CNG stations until end 201315 16. Development of NGV refuelling station network in Europe LNG growth driven by internationalEuropean transport heavy duty transportNetwork of refuelling stations to Buses and local distribution willserve long-distance routes continue to facilitate CNG (Blue Corridors) growth, with LNG entering the picture Light duty vehicles and personal cars will grow Inter-regional in CNG only transport First connections between refuelling stations RegionalPilot- transportProjects Single refuellingFirst movers stationsbenefit frommarket chances LNG CNG16 17. Comparison CNG and LNGProsPros Proven technology available here and today Higher energy density than CNG resulting in Choice of vehicles available with new modelssmaller tanks, less weight and higher mileagebeing added by the automotive industry Lower weight of vehicles resulting in higher Generally able to meet EU 6 standards utilization of fuel efficiency Zero or reduced excise duty in many For buses: lower centre of gravity due toEuropean countries, expected to last until 2030 lighter fuel tank mounted inside the vehicleresults in higher driving comfortCons Reduced excise duty with high chances ofsustainability until 2030 (as for CNG, but in Extra weight of gas cylinders decreases fuelsome countries CNG and LNG are treatedefficiency and driving performancedifferently) For buses: sometimes height restrictions for lowbridges due to mounting of storage on the roof Cons Lower energy density than conventional fuels orLNG New and well tested technology, but refuelling infrastructure yet to be developed Excise duty regimes converge towards traditionalfuel taxation More complex supply chain than for CNG requires reliable partners for supply + refuelling Choice of OEM vehicles still limited17 18. Gazprom - worlds largest gas reserve holder 50 Gas Reserves, Trillion Cubic Meters .Russia holds 27% of worldwide gas reserves 40 Gazprom holds 16% of worldwide gas reserves (23 Trillion Cubic Feet )Gazprom holds 4.2 billion barrels of Crude Oil reserves 30 LNG Plant Sakhalin : 2 x trains producing 9.6 million tones per annum.LNG cargoes delivered worldwide 20Sakhalin has the potential to expand with further trainsPlanned Shtokman and Yamal LNG plants 100 VenezuelaNigeria Iraq NorwayUAEUSAAlgeria CanadaYemen QatarOmanIranUzbekistan Pakistan India ChinaUkraine Ukraine LibyaRussia Romania Egypt MalaysiaKuwaitIndonesia MyanmarS ArabiaKazakhstanBolivia Netherlands AustraliaAzerbaijanOther AfricaArgentinaTurkmenistan Trinidad & TobagoSource: BP Statistical Review of World Energy, 200618