"The potential market is somewhere between 3,000-6,000 filling stations for CNG," Russian Machines CNG director, Peter Zolotarev

"The potential market is somewhere between 3,000-6,000 filling stations for CNG," Russian Machines CNG director, Peter Zolotarev

GAZ Group parent Russian Machines, claims CNG is the cheapest of commonly used motor fuels, with costs per 100km almost 60% lower than for liquefied petroleum gas (LPG). It also says CNG is more than twice as cheap as a diesel-powered car and 2.5 times lower price than a gasoline vehicle.

Russian Machines CNG project executive director, Peter Zolotarev, spoke to Simon Warburton from the company's Yaroslavl plant about the possibility of using the gas in the country and some of the infrastructure challenges associated with it.

 j-a: How popular is retrofitting CNG in vehicles and in particular, buses?

PZ: There is a big market for CNG, which is done by aftermarket. It is very hard to tell what is the exact number of CNG buses on the market, but they are in many [Russian] regions.

Economically, it makes sense, the problem is, it is piecemeal by region. There is the Tomsk region in the south of Siberia and in the south of Russia, [where] CNG is very popular.

Tomsk was driven by the development of CNG because it was the regional HQ of [energy provider] Gazprom and they developed it for their own fleet.

When you do something for corporate support, you develop market potential for commercial transportation.

j-a: Could this technology be used outside Russia?

PZ: Generally speaking, we supply to Russia, but it definitely opens some prospects for export.

j-a: How does the Russian government incentivise CNG bus purchase?

PZ: We have a five-year programme to subsidise the initial price of the bus - the Federal government is doing that and is available at the moment.

We will be glad if this mechanism is developed for LCVs and smaller commercial companies to develop [the] LCV market, which has also got potential here.

We think the Russian government understands there is great potential [as well as for] ecology and economics. The President of the country [Vladimir Putin] was chairman of a big meeting to discuss this programme. There was a decree signed [for] development of the CNG market in Russia recommending for cities of more than half a million people, to convert half the [bus] fleet to CNG. It opens a great market for CNG.

[They are] also starting to address the regulation of transport infrastructure. If you tend for public transportation, it is recommended you use ecologically-friendly CNG technology.

j-a: Is it mainly buses that could use CNG technology?

PZ: The total bus market in Russia is huge. We supply more than 5,000 buses covering half the market.

j-a: On what basis is President Putin and the various Russian committees charged with evaluating the prospects for CNG, able to draw on accurate data?

The State [formerly] had no official statistics to understand, but it is critical to know exactly what is happening in the automotive market. The statistics are [now] available and the question is are [they] correct? [For example] many people are converting their cars and not registering the conversion.

j-a: What about private car owners - can they also be incentivised in Russia?

PZ: I think it is important to give tax privileges to those who own CNG cars to motivate them. In some regions like Nizhny Novgorod, we have a 50% road tax discount if you operate with a CNG or LPG car.

j-a: Why did you choose Westport as your partner?

PZ: We put out a number of tender procedures and Westport supplied us with LPG and CNG applications. They have very good products. We consider converting our diesel engines, they have good experience.

j-a: How would you characterise the ease of using CNG in practical terms, for example filling stations?

PZ: The current infrastructure is something like it was in old Soviet times. The development was not very aggressive in the last 15-20 years [and] we have something like 249 filling stations across Russia.

The potential market is really somewhere between 3,000-6,000 filling stations for CNG. The country is so huge. [Maybe] they should be dual purpose - I think 90% of the market should be multi-purpose.

I saw many people install CNG for personal cars, but definitely I am waiting for OEM solutions rather than garage refurbishing.

Russian Machines also highlighted the ambitious drive in the Federation to promote CNG use that will see pilot filling infrastructure projects set up in ten major cities from 2014-2015.

Some 2,500 buses will be supplied to existing depots, with training and maintenance capabilities provided. Stage two of the programme from 2016-2020, will see buses more than 15 years old replaced across Russia, with a CNG filling infrastructure established at the same time.

Each particular city will need to have at least 100 CNG buses as any smaller number will make investments less efficient.

Last month, Russian Machines parent, Basic Element chairman, Oleg Deripaska, also signed a deal with oil and gas company, Rosneft, to cooperate on the production and distribution of auto gas fuel, particularly in the Moscow and St Petersburg regions, in the Krasnodar Territory and along major, Europe-bound car routes.

Rosneft will look at the potential to place CNG filling modules at its own stations. For its part, Russian Machines plans to provide technical solutions to integrate auto gas filling modules with Rosneft infrastructure and will begin a programme to supply gas-powered vehicles to domestic automobile fleets.