Speech by Alexey Miller at the conference “Environmental Challenges and the energy sector” in the context of the European Business Congress

……….

I would like to talk more about one of such perspective ideas.

The general meeting of the European Business Congress and our Conference timed to the start of the cars on gas rally. I am sure that not only the starting gun will not misfires, but the whole rally which will last a week and will be mainly on the roads of Germany bring pleasure to the participants and receive press coverage.

This is one of the actions that we plan to contribute the development of the European market of gas fuel, increase efficiency and popularity of projects related to the creation of a European network of gas stations.

On the way from Prague to Greifswald, and it is there and where the rally will end, as you know, in the autumn will come, “Nord Stream”, participants will learn about the plans of our partners of the concern “Volkswagen” for the production of gas-cylinder cars, and in Berlin at the exhibition, by the European natural Gas Vehicle Association, to provide opportunities to the public vehicles run on environmentally the cleanest of fossil fuels.

On the way from Prague to Greifswald, ie where the rally ends, as you know, in the autumn will be the “Nord Stream”, participants will learn about the plans of our partners from the “Volkswagen” about production of gas-cylinder cars, and in Berlin at the exhibition organized by the European Natural Gas Vehicle Association, to provide opportunities to the public vehicles run on environmentally the cleanest of fossil fuels.

Currently natural gas used by about 1.4 million vehicles in 40 countries across Europe including Russia.

The market of vehicles running on natural gas represented mainly by vehicles consuming compressed natural gas (CNG). At the same time opens up a broad prospects for the use of liquefied natural gas (LNG) primarily for heavy trucks, as well as synthetic diesel fuel GTL (gas-to-liquids).

The increasing use of motor vehicles, tougher laws on environmental issues, as well as planned in the EU move to a standard “Euro 6” will give a new impulse for use of natural gas as a transportation fuel, especially in freight transport.

Depending on the decisions that are taken today, the demand of 80 billion cubic meters of natural gas as a fuel in Europe can be achieved by 2030, which is about 10 times the current consumption.

What will this mean in terms of ecology? About a quarter of greenhouse gas emissions in the EU accounts for transport and this number continues to grow. According to the European Commission in 2008 71.3% of emissions from the transport sector “provided” by cars.

There are ambitious plans for the EU to reduce air pollution: to 2020 greenhouse gas emissions must be reduced by 20% compared with 1990 and to 2050 – 80%. To achieve these objectives the European Commission has recently called for the reduction of emissions of greenhouse gases by motor vehicles to 60% by 2050 compared with 1990.

EU officials encourage manufacturers to move production of more environmentally friendly modes of vehicles by taxing fuel. But natural gas as the cleanest hydrocarbon fuel is ideal for the ambitious environmental goals in Europe as in the field of transport as in other sectors.

Modern vehicles running on natural gas, reduces CO2 emissions by 20-25% compared to gasoline vehicles.

Taking into account probable further tightening of environmental regulations, as well as through more complete combustion of methane, this type of transport is an effective long term solution.

Oil prices reached a high level. Against this background of natural gas – cost-efficient solution for the transportation industry. Here’s an example. In Italy, gas cars are the most promising in the following segments: cars for young people, public transport (including taxi), heavy-haul transport. The average gas taxi in Rome spends EUR 11.10 for fuel costs per night for a run of 200-220 km. A similar cab with a diesel engine for the same mileage fuel costs 20-25 euros. The economic profitability of natural gas taxi obvious. For suppliers the advantage of using gas as a motor fuel – all season, the lack of winter and summer peak demand slumps.

We believe that the issue of development of gas motor transport should take its rightful place in the debate about the future of European energy which we called at the outset. “Gazprom” will also do his best for the future of NGV vehicles.