Last year the number of gas cylinder cars using the compressed natural gas as fuel reached 110 thousand in our country. In 2016 it is planned to put into operation the record number of automobile gas-filling compressor stations. Last year the world methane vehicle fleet reached a point of 23 million units and the number of cars working on liquefied hydrocarbon gases stepped over the mark of 26 million. The main driver of branch, as well as all last years, is China.

Back in the future

By 2012, according to NGV Global, the number of gas cylinder cars working on methane reached 15 million units. And at the end of 2015 their number exceeded 22.7 million. An average gain made about 2 million cars in recent years. Besides annual sales increased: in 2010 1.9 million gas cylinder cars on methane were sold and in 2015 — 2.4 million. Considering dynamics of a gain of gas cylinder cars in the world and also that fact that there were 26 million propane-butane cars at the end of 2015, we will hardly be mistaken having declared that this year the total of gas cars will exceed 50 million units. By the end of this year the world park of methane cars has to reach a point of 25 million.

Having addressed to forecasts of growth of the market which were made public in the period of 2009 for 2011, we will see that the forecast of the International gas engine association (together with the Latin American gas engine association) which assumed appeared the most exact that in 2015 the world methane vehicle fleet will reach 22.5 million. At the same time the forecast published by the International Gas Union assume two scenarios of development of the market. According to the «pessimistic» scenario of the International Gas Union, in 2015 the market had to reach a point of 20.4 million units and on «optimistic» one – 25.2 million. The research of Pike Research which was plentifully quoted during the same period sounded the most, perhaps, modest forecast — 17 million methane gas cylinder cars by 2015. Actually this level was reached in 2012.

More strongly than colleagues the Russian National Gas Engine Association missed the mark which at that time assumed that in 2015 this indicator will reach 41.6 million. However, the Russian National Gas Engine Association look in the future on the horizon of the next 15 years is more reasonable. The Russian National Gas Engine Association predicted gradual saturation of the market after rapid growth of the first five years period and achievement of a mark of 78 million cars by 2030. The international organizations though showed the moderation adjoining on care on the horizon of the first five years but expected sharp growth of the market in the next years. The most moderate of foreign forecasts assumed that in 2030 at least 100 million methane gas cylinder cars will travel on roads. Optimistic scenarios drew in detail excess of a mark of 200 million.

Certainly, estimating prospects of the market, it would be simple to count as a mistake an average gain of methane gas cylinder cars and to assume that the situation will not change in the future. It changes constantly. The market of gas cylinder cars is affected by a set of factors which need to be considered to imagine the future changes: beginning from energy costs finishing with the inter fuel competition. Every year introduces amendments in earlier sounded forecasts. Today the gas engine branch shows continuous growth. So far all question in that how considerable this growth is. For example, at the end of 2015 the Navigant Research Company published the forecast according to which annual sales volume of methane gas cylinder cars will grow from 2.4 million in 2015 to 3.9 million in 2025. And in the forecast of the middle of 2016 the company considered that total number of automobile gas-filling compressor stations will increase on 4.4% a year and will reach nearly 39.3 thousand by 2026.

Days of the last future

The main factor of the last years influencing also development of gas cylinder branch is price of oil. Together with them the prices on petrol and diesel fuel change. In many countries fuel fell in price for the last two years. For example, in Europe in 2015 petrol price fell on 3-13%, and on diesel fuel — to 15% (depending on the country). By the way, it is indicative that in Norway which is famous for the incredibly expensive fuel and at the same time is the large oil-producing country, Ai-95 fell in price for 6.3% in 2016 and diesel for 3% only. Now fuel price in Norway is approximately three times higher than in Russia.

Yes, the price of compressed natural gas also changes together with petrol price. But in general, growth rates of the gas engine market cannot remain the same that they were at prices of oil in 100 dollars. Besides, today it is impossible to tell, how soon prices of oil will return to former levels and as it will affect the market of gas motor fuel.

Besides, pressure upon the market of gas motor fuel is also made by the market of electric cars. We with irony treat the statement that introduction of electric cars will kill the oil and gas industry and will make gasoline (and gas) unnecessary. But the inter fuel competition became aggravated in some markets — due to redistribution of the state resources. Besides, we will not forget about enormous media support which is free and involuntarily given to the «electric» direction. And it is direct fight for the consumer.

The enormous disproportion exists in the world of alternative motor fuels: the greatest attention is paid to electric cars while gas motor fuel is deprived of attention of mass media, as well as of wide audience. In what the problem og gas engine branch consists here? The gain of electric vehicle fleet is provided due to strong state support in many countries of the world. Support is expressed as in direct grants for purchase of electric cars and in numerous preferences, including tax privileges, free parking spaces and permission to move on the allocated strips.
Certainly, gas engine cars also receive a share of the state support. But under the conditions of an economic crisis which covers also the countries of Europe, the question of distribution of privileges rises very sharply. And here we pass to political will in each certain country as to the important factor influencing development of the whole gas engine branch. It is not a secret that the last years the chief supplier of essential news and very encouraging statistics is China. This country has the most noticeable impact in branch today: both as consumer and as supplier of the equipment.

Future side

Only seven years ago the five of leaders of compressed natural gas branch looked as follows: Pakistan, Argentina, Brazil, Iran and India. But since then the alignment of forces changed — China became a leader, having increased since 2009 gas engine vehicle fleet ten times. Last year it reached parity with Iran and on this the moment surely occupies the first place.

By the beginning of 2016 4.595 million gas cylinder cars worked on methane in China. It is remarkable thereof 184 thousand are representatives of rather young direction of transport on liquefied natural gas. The way of China to these indicators took 27 years. But the most considerable breakthrough was made during the XII five years period (2011-2015). By this moment the necessary industrial base was created, as well as plans for expansion of use of environmentally friendly transport started being implemented.

Prompt development of vehicle fleet is kept by not less prompt growth of filling network. Today the total of methane gas stations exceeded 7000. Thereof about 2500 are liquefied natural gas stations. According to China Automotive Engineering Research Institute, in 2014 methane transport consumed 22 billion cubic meters of gas that made at that time 12.4% of the general consumption in the country. Let’s note that there are also more modest estimates — 10 billion cubic meters of annual consumption.

The heavy-load equipment will become the main engine of gas engine branch in China during the XIII five years period (2016-2020). According to China Automotive Engineering Research Institute, by 2020 more than 20% of all trucks sold in the country will work at gas. By this moment a number of gas stations will exceed 12 thousand, thereof liquefied natural gas station will make 5.2 thousand, and the number of methane cars is 8.7 million. Consumption of natural gas on transport will exceed 50 billion cubic meters.

By the way, in June, 2016 results of joint research of the Shell Company and German space center about the future of cargo transport were sounded. One of its conclusions is that the only viable alternative of oil is liquefied natural gas. It is supposed that in 2040 65% of the new registered trucks will use liquefied natural gas. But let’s return to China.
Over the last ten years the People’s Republic of China became the largest automobile market in the world. Some popular brands which have luck to fix production in the territory of China now are produced in the territory of Celestial Empire in larger volumes than in all other countries of the world together taken. The total output of cars in China exceeds 10 million units a year. And domestic market of the country is far from saturation. For the first seven months of 2016 the Chinese automotive industry showed growth. Production increased on 9% and sales on 9.8%. Only in July 1.96 million cars were released and 1.85 million were sold.

A part of gas motor transport goes for export. So, in the middle of the current year the Sanbao Corporation from Xinjiang Uyghur Autonomous Region reported about plans to deliver 92 buses working on compressed natural gas to Kazakhstan, besides 40 buses were already delivered to the Kazakhstan party. Earlier the same company delivered 195 trolleybuses to Almaty and in general about 5 thousand pieces of equipment were delivered to Central Asia by Sanbao.

The Chinese government considers the liquefied natural gas direction as the extremely perspective. At the moment it is focused mainly on heavy trucks and buses. At the expense of it great demand for fuel at rather small amount of consumers is provided.

At the same time development of liquefied natural gas network causes concern both in consumers, and in sellers. Reduction of prices of oil caused reduction of prices of the liquefied natural gas. Besides, according to Chinese experts, the present prices on liquefied natural gas in domestic market are irrational. Certainly, the consumer wants cheap fuel. But the amplifying inter fuel competition in reality turns into financial losses for all parties. It is noted that some gas stations in the People’s Republic of China are compelled to sell the liquefied natural gas at 3800 Yuans for 1 ton (36.5 thousand rubles) while the buying price makes only 3750 Yuans for 1 ton.

By estimates of the Chinese party, about 80% of all liquefied natural gas stations in 2016 were almost unprofitable. Development of the multi fuel gas stations combining advantages of all types of fuels could become a decision. And, certainly, increase in prices for energy carriers. Eventually, development of the gas engine direction for China is not only and not so much economic but ecological project. The paradox is that the higher are prices of oil, the purer is the air of the Chinese cities.

By the way, according to the messages of Xinhua agency, during 2005-2015 China saved energy resources at 1.57 billion tons in coal equivalent. Among other actions which allowed reaching such indicator, release of more eco-friendly cars is called.

Memories of the future

Let’s not also ignore propane-butane direction. Liquefied petroleum gas or as it is called auto gas wins against compressed natural gas on simplicity in storage and the price of re-equipment of the car. Though loses on ecological indicators. Today 70% of the largest car makers produce propane-butane models.

In 2010 the world vehicle fleet using the liquefied hydrocarbon gases as fuel made 14.6 million cars, and at the end of last year, according to The World LPG Association, it reached 26 million. For the same period the number of gas stations in the world grew from 53.4 thousand to 71 thousand (thereof about 40 thousand in Europe).
According to WLPGA, in 2015 the world production of liquefied petroleum gas reached 284 million tons, thereof 9% were used as motor fuel. In 10 years this indicator grew on 50%. However a half of auto gas is consumed by only five countries: South Korea, Turkey, Russia, Thailand and Poland. It is remarkable that the largest propane-butane vehicle fleet possesses Turkey (more than 4 million units) today. Russia and Poland follow (more than 1 million in everyone).

Different countries of the world stimulate transfer of equipment to liquefied hydrocarbon gases. State programs of the transfer of equipment to gas work, subsidies are allocated and free parking and the preferential taxation is provided. For example, in China, in Guangzhou, according to WLPGA, 31 thousand buses and taxi work on liquefied hydrocarbon gases. And in Italy the program of encouragement of the transfer of transport to alternative types motor fuel works according to which, a car owner wishing to transfer the transport to gas (propane-butane and methane) can count on a subsidy in the amount of 500 to 750 euros.

The European countries in general prefer propane-butane to compressed natural gas as motor fuel. Except for Italy: from 1.273 million methane cars in Europe 970 thousand have Italian «registration» (in 2014 there were 885 thousand of them), according to the European gas engine association (NGVA Europe).

Certainly, we do not intend to begin within this article disputes about the civilizations therefore, without being broken off between Klyuchevsky and Danilevsky, we will refer Turkey and Russia to Europe, especially as the bulk of gas stations in our country is really concentrated in its European part. Let’s remember also that in Germany, according to NGVA Europe, there were 80.3 thousand cars on compressed natural gas and liquefied natural gas, 130.4 thousand hybrids, 25.5 thousand electric cars and 475.7 thousand cars on propane-butane by the beginning of 2016.
According to Spanish Association of Liquefied Natural Gas Operators, consumption of propane-butane in Spain in 2015 grew on 22% — from 35.56 thousand tons to 43.2 thousand tons. A number of the cars working at liquefied hydrocarbon gas reached 50 thousand (at 5 thousand methane cars) and network of fueling stations — 500 stations. By 2020 this country planes to bring propane-butane vehicle fleet to 120 thousand and filling network fleet to 1200 stations. The state subsidizes transition to alternative motor fuels. Depending on type of transport and type of fuel the subsidy can make from 200 to 20 thousand euros.

France also cannot brag about impressive methane vehicle fleet. There were about 14 thousand gas cylinder cars following the results of 2015 — generally buses and heavy trucks. And to some extent such approach is justified as this class of vehicles on average consumes in 28 times more fuels in a year than cars. Respectively, transferring to gas a small amount of the main consumers of fuel by small forces the big problem is solved. By the way, Engie Company intends to invest in gas stations on compressed natural gas and liquefied natural gas 100 million euros till 2020. It plans to construct 30 automobile gas-filling compressed stations in France and 70 liquefied natural gas stations across all Europe. The liquefied natural gas will be directed generally on trucks and also on a bunkering of the ships in the Belgian ports of Antwerp and Zehebrugge.

By the way, in the USA, which some years bombarded mass media news about development of methane transport against slate boom, gas engine branch develops very slowly. In 2014, according to Natural Gas Vehicles or America, 18 thousand methane vehicles were sold. Their general quantity reached 152.3 thousand. Unfortunately, the specialized organizations do not hurry to share statistics on gas engine branch in the USA for 2015 and the more so for the first half of 2016. So, the American Energy Information Administration in March, 2016 in the annual power forecast used as a starting («historical») point data for 2014. By the way, according to this forecast there is rather optimistic picture: gradual growth of annual sales of methane transport to 80-85 thousand units by 2023 and fixing at this level till 2040, however, last losing years force to doubt a possibility of such jump. By the way, the forecast for 2015 spoke about a gain on 6.8 thousand units of compressed natural gas-transport and 3.1 thousand — on liquefied hydrocarbon gases. However, the main alternative fuel for the USA is not gas but ethanol at all.

And here our Caspian neighbor Iran, on the contrary, relied on natural gas. According to the Power Commission of Chamber of Trade, Industry, Mines and Agriculture of Iran, in 2014 this country imported in total more than 4 billion liters of gasoline. If not compressed natural gas which occupies now about 25% of the fuel used by cars, import of gasoline would grow more than five times. According to the Minister of oil of Iran, about 20 million cubic meters of compressed natural gas are consumed daily in the country on transport. Thus the daily volume of processing makes about 2 million barrels of oil.

Actually, compressed natural gas (and in significantly smaller degree propane-butane) together with rather developed automotive industry became for Iran an important factor of survival and development in the conditions of sanctions. Now there are foreign investors in the country. But at present energy costs they cannot yet offer Iran interesting conditions that the leaders of the state agreed to their participation in development of filling networks.

The Earth of the future

Propane-butane direction is the most developed in our country. It occupies about 2.4% in the structure of consumption of all types of fuel. And 0.4% only accounts for a share of compressed natural gas. The state program «Introduction of natural gas vehicles» works to correct this situation. It is divided into sub programs on a motor, railway, sea, river, air transportation and equipment of a special purpose.
It is supposed that by the end of 2020 the total volume of consumption of gas motor fuel on the motor transport in Russia will make 10.2 billion cubic meters and total number of automobile gas-filling stations (including automobile gas-filling compressed stations and cryo refueling station) — 2870. A target indicator of total volume of consumption in 2020 on all means of transport, including water, are 13.2 billion cubic meters, thereof 2.8 billion cubic meters will account for a share of liquefied natural gas.

Today the total number of methane gas stations in Russia exceeds 270 units. Thereof 213 belong to Gazprom. According to the information made public at the meeting on the development of the Russian market of gas motor fuel held at the beginning of 2016 on Gorky Automobile Plant, the volume of realization of compressed natural gas through the network of the company grew in 2015 on 8% — to 433 million cubic meters Besides, the Group includes Gazprom Neft Company. In 2015 the number of automobile gas-filling stations made 146 units as a part of its multi fuel filling complexes. 12 thousand tons of compressed natural gas and 105 thousand tons of liquefied hydrocarbon gases were realized on them.

Now Gazprom realizes the program of construction of new automobile gas-filling compressed stations. In 2016 it is planned to finish a construction of 35 methane gas stations and to reconstruct four more stations. It is expected that the volume of consumption of gas through the network of Gazprom will increase on 11% — to 480 million cubic meters.

The Ministry of Energy expects total growth of compressed natural gas sale through gas stations of all owners from last year’s 487 million cubic meters to 590 million cubic meters. Also according to the Ministry of Energy, during the period from 2011 to 2015 it was put into operation only 19 stations in the country. That is in 2016 almost twice more gas stations than for the last five years will be put into operation. And the total of automobile gas-filling compressed stations in Russia will step over a mark in 300 units.

Unfortunately an average loading of a network remains low — about 25%. For stable increase in this indicator it is necessary to expand methane vehicle fleet at least on 15-20 thousand units a year. The main contribution to this process is made at the moment by Gazprom, realizing the special program for the transfer of transport to natural gas. Last year the Group bought 1184 units of gas cylinder equipment. For comparison: in total it was sold 3172 gas cylinder cars in Russia last year, thereof 3044 — domestic production. This indicator was on 39% more than in 2014. Also about 5000 units of transport were converted on natural gas. The total number of gas cylinder cars of all classes in our country reached 110 thousand.

Considering the plans of the state for the transfer to gas of considerable part of transport in municipal vehicle fleets, the level of growth on 15-20 thousand units of gas cylinder transport in a year is represented quite achievable. Let’s note that in 2016 Gazprom intends to increase the gas vehicle fleet on 1459 units. However change of a macroeconomic situation calls into question opportunity to reach the state program of the all-Russian indicator accepted in 2013 in nearly 2.7 million methane cars by 2020.

Current situation forces to be glad for domestic car manufacturers — introduction and expansion of lines of natural gas vehicles proceeds. In September the GAZ Group plans to start in a mass production of The Urals NEXT with the gas YMZ-536 engine. It will stand in a row with gas vehicles of their production line of GAS which are already available and delivered to consumers. Besides, last year in Nizhny Novgorod the mass production of composite high-pressure tanks for natural gas vehicles and gas stations was started. In turn the Ulyanovsk Automobile Plant carries out tests methane UAZ Patriot.
The next attempt to enter the gas engine market is made by AVTOVAZ. Gas cylinder Priora took part in the motor rally The Blue Corridor-2008. It was supposed that this car will go to a series soon. Then, in 2010, the producer declared that Lada Priora — CNG working on gas and gasoline will be more expensive than the petrol version on 40 thousand rubles. But it did not come off the assembly line. There were talks about gas Kalina but it only just was going to change generation. Gas Lada Granta was announced. But also here business did not go further than announcements. At last, last year the hybrid Lada Vesta CNG (created within the memorandum of cooperation with JSC Gazprom Gas Motor Fuel) was presented. And this year anyone could look at the beautiful Vesta (really a very nice car) on the Moscow International motor show. The author of these lines used a chance and should say that the car looks as an excellent demand for a victory in a mass segment. Now we wait for start in a series at the end of 2016. Taxi especially waits for this car, because such a car is a pure economy on fuel.

Let’s remind that in July, 2016 the Government issued the resolution on allocation to producers of buses, and also equipment on gas motor fuel for subsidy housing and communal services of 3 billion rubles. By the way, rules provided also subsidizing of the equipment provided with the hybrid engine. Its size will make 50% of a subsidy for equipment with the gas engine.

Also the European business of Gazprom develops. At the end of last year it and the dependent companies possessed 52 gas-filling stations in Germany, the Czech Republic and Poland. And in 2016 their quantity increased on 14.

The East direction is also not forgotten. Last year Gazprom and Vietnam Oil and Gas Group (PetroVietnam) reached the final agreement on establishment of joint venture for release of gas cylinder cars in Vietnam. Besides in October 2015 the specialized joint venture PVGAZPROM Natural Gas for Vehicles, which capital totals 1 billion dollars, obtained the license of municipal Department on planning and investments.

Gas as motor fuel is demanded in the majority of the largest countries of the world today. And for Russia in view of a unique geographical position and existence of rich natural resources actual directions are: rather developed propane-butane and methane. Perhaps, today some state plans look unrealizable and a part of them really should be reconsidered for the objective reasons but the fact that every year methane transport is more and more demanded by buyers, and the Russian producers at last are ready to satisfy growing demand. It forces to look forward rather optimistically. And let not in 2020, but in 2025 there will go 2.7 million required cars, trucks and buses working on methane on the roads of our country.