Pakistan Country Report January 06

– 800 CNG refueling stations
– 300 more expected within 6 months
– Almost 900,000 natural gas vehicles (NGVs)
– CNG fuel price a major benefit

Compressed natural gas (CNG) development in Pakistan started in the mid eighties when HDIP* set up two CNG refueling stations in Karachi and Islamabad (major cities of Pakistan). Due to excellent production and distribution of natural gas in Pakistan, today there are more than 800 CNG refueling stations operational either at existing petrol stations or separately on dedicated sites. 300 more are expected in the coming six months.

CNG, being a well proven alternative fuel with passage of time, has increased its consumers in Pakistan to almost 900,000 vehicles making Pakistan the 3rd largest user of CNG vehicles in the world after Argentina and Brazil. Around 150,000 vehicles are converting to CNG each year.

State of the Art Equipment

CNG refueling stations of Pakistan are equipped with state of the art automatic controls and systems. High Pressure Compressors installed are of various design types like L-type, W-type, V-type, D-type. These Compressors are usually imported from America, India, New Zealand and China. Mother/Daughter CNG stations in Pakistan are not operational currently, however Pakistan State Oil (PSO) signed an MoU with a UAE based firm last year for the setting up of Mother/Daughter CNG facilities at their retail outlets on highways at 100 km intervals where piped gas is not available. Currently there are no vehicle refuelling appliances (VRAs) operating in Pakistan.

Favourable Pricing

In the past 3 years petroleum product prices have increased by 100% and CNG by 47% (from Rs.21/kg to Rs.31/kg) in Pakistan. This has been a significant driver for the conversion of vehicles to CNG. Current fuel prices in Pakistan are:

Petrol Rs. 56.29 / liter ($US0.94)
Diesel Rs. 37.18 / liter ($US0.62)
CNG Rs. 31.00 / kg ($US0.52)
(Prices obtained from PSO)

Government Policy & Support

The Government is taking major steps to promote CNG by exempting all taxes and duties for the machinery and equipment used for CNG refueling and conversion. The Government is also supporting importers to set up manufacturing facilities in Pakistan to produce CNG kits, CNG Dispensers and CNG Cylinders locally. The Government has planned to grant license for setting up compressor factories in Pakistan, thus allowing users to save its precious foreign exchange.

A few months back the Government also issued directives requiring conversion of all official vehicles to CNG. In this regard the Government is planning to set up more and more CNG refueling stations by tendering in different cities.

Different CNG associations are also working in Pakistan for betterment of CNG. They have asked the Government to give incentives in the form of providing separate higher flow or larger diameter pipelines to refueling stations and to facilitate in obtaining ‘No Objection Certificates’ (NOC’s) and licenses from different Government organizations.

Future Prospects

In short, the CNG industry has a wide potential in Pakistan; Pakistan being the natural gas producer and having an excellent distribution network is well geared to use this resource to its maximum potential, in terms of protecting its environment, saving its precious foreign exchange, and offering economical fuel to its population.

* HDIP = Hydrocarbon Development Institute of Pakistan, an autonomous body of the Ministry of Petroleum & Natural Resources, Pakistan

Some information sourced from DAWN Newspaper

Japan Country Report December 05

– More than 25,000 NGVs
– 289 refuelling stations
– 686 vehicle refuelling appliances
– Energy security and greenhouse gas policies playing increasing role

As of the end of September, 2005, there are more than 25,000 natural gas vehicles (NGVs) in Japan, supported by 289 natural gas refueling stations, 29 of which are service fleet and bus operators exclusively, as well as 686 vehicle refueling appliances (VRAs).

NGV’s have primarily been promoted due to the solution of the air pollution problem and to promote alternatives to crude oil derived energy. As a result, NGV’s have become popular among heavy vehicles, trucks and buses, where the diesel substitution produces the greater air quality benefits.

In recent years, the social interest in greenhouse gas reduction has risen with the coming into force of the Kyoto Protocol. Due to the CO2 benefits of natural gas vehicles, this has resulted in an increased interest in NGVs for gasoline substitution, particularly among passenger cars and light to medium duty vans.

Due to Japanese Government policy on the reduction of the greenhouse gas, in addition to the existing green house gas reduction law, the law concerning the rationalization of the energy use will be revised from April, 2006. The main point of this revision is that the control subject of this law expands into the transportation field (the transportation business and the consignor ) from the conventional factories. The revision of this law has been decided in the Diet (Japanese Parliament) and the Japanese Government is reviewing the detailed standard which is necessary to operate this law.

From the viewpoint of energy security, natural gas is playing an important role to decrease petroleum dependence. With crude oil prices increasing substantially in the past year, this has become especially important. These price rises, along with the added advantage of relative price stability, have made natural gas competitive in relation to gasoline and diesel. Japan imports natural gas as LNG (liquefied natural gas) and the pricing structures and longer-term contracts make LNG pricing less volatile, thus making LNG an attractive alternative to crude oil and its derivatives. In Japan fuel price depends on the contract between the filling stations and the users, but prices currently average around 125 yen/l of gasoline, 100 yen/l of diesel, and 70 yen /m3 of CNG.

Japan’s strong automotive manufacturing sector produces a large number of OEM (original equipment manufacturers) natural gas vehicles, The presence of OEM NGVs in Japan means engine and emissions performance is of an exceptional standard. Unfortunately, this also means that the price differential between natural gas and diesel or gasoline vehicles is relatively high. While mass market penetration of NGVs would bring prices down, reaching that stage remains a problem for the industry

Despite the above challenge, by effectively using the policy of Japanese Government concerning energy security and the global warming problem, the NGV industry members in Japan are confident that natural gas vehicles in Japan will increase in popularity in coming years.

Tamaki Yamada
Manager,Technical and Planning Section
Natural Gas Vehicle Project Department
THE JAPAN GAS ASSOCIATION

 

NGV Development in Thailand

Introduction

Thailand is a net importer of oil. The energy consumption is about 1.8 million barrels per day (last 5 years CAGR = 6%) and is expected to be around 3 million barrels per day by 2015. Oil is the main source of energy in Thailand (47% of the total energy consumption), about 67% of which is consumed by transportation sector. As a result, the high price of crude oil in the world market nowadays has a great impact on motorists and the country’s economic expansion.
There are about 38.24 TCF of natural gas reserves in Thailand (including the reserves in the Thailand-Malaysia Joint Development Area; JDA). Natural gas has increased steadily its share of energy supply from 14% in 1992 to 28% in 2004, which amounts to 3,000 MMSCFD (million cubic feet per day) or the equivalent of 515 thousand barrels per day of petroleum oil. Like many countries around the world which have indigenous natural gas reserves, the Thai government has strongly promoted alternative fuels since 2002. Gasohol, bio-diesel as well as natural gas have been selected to be major alternative vehicle fuels to reduce the impact of the high oil price. Among these, natural gas is the most favorable fuel because it can replace 100 % of oil usage. Furthermore, it generates better tail-pipe emission than diesel and gasoline.

NGV experience in Thailand

Since 1984, NGV has been developed in Thailand mainly for the emissions reduction in Bangkok area. The long history of the development of NGV for use in heavy-duty vehicles is summarized in the following table.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The above table shows that PTT has been working very hard in trying many conversion technologies, starting from the cooperation from New Zealand’s government in 1984. Five in-use public buses of the Bangkok Mass Transit Authority (BMTA), Isuzu 6 BD1, Hino EH100, Isuzu DA125, Hino EH700 and Mercedes Benz OM360 have been converted to use NGV for demonstration purposes. There have been 3 other trial projects involving the conversion of in-use buses and trucks to dedicated CNG and diesel/CNG dual fuel (DDF) operation by using a simple gas mixer. These trials proved unsatisfactory to the fleet owners in terms of fuel economy and drivability.

As a result of poor performance of the in-use converted buses, in 1993 the Thai government decided to give a grant to BMTA for the purchase of 82 OEM dedicated CNG buses (44 MAN & 38 Mercedes Benz) while PTT invested in a CNG refueling station to service these buses at their depot. This scheme was aimed at promoting NGVs as a means of tackling air pollution problems in the capital. Although they have proved to be satisfactory in general, some technical problems occur due to the incompatibility of NGV quality in Thailand. These problems have been partially solved while the rest is underway. In view of the economy at that time, the fleet has proved to be not so attractive but in view of exhaust emission it has been proved to be a success.

In 1997, there was an economic crisis in Thailand, the Thai Baht was devalued, but the crude oil price was still relatively high. The Thai government has gradually removed its oil price subsidy for both diesel and gasoline. The NGV project was reestablished to promote natural gas as an alternative vehicle fuel to alleviate the impact of the high oil price as well as addressing the environmental problems in the greater Bangkok area. Therefore PTT, as a state owned agency, turned to focus on in-use vehicle conversion again in 1999. The pre-marketing demonstration project was set up by converting 16 city buses to NGV, using the diesel dual fuel system.

The lessons we learned can be concluded as follows;
– Conversion technology is a crucial factor. Our experience is that simple gas mixer conversion technology is prone to pre-ignition in the intake manifold. Since a vacuum-control gas mixer was used for pre-mixing of gas and the intake air of the engine, the intake manifold was therefore filled with combustible gas, which was believed to be the cause of detrimental misfiring. The engines had been converted from diesel to spark ignition, with a resulting increase in the combustion temperature. The increased combustion heat was not removed by additional cooling provision, such as increasing radiator capacity, therefore the engine would naturally operate at a higher temperature and be prone to pre-ignition. The converted engine power obviously dropped to about 25-30%.

– DDF conversion; both diesel and NGV were used at the same time in different proportions depending on the load and speed conditions of the
engine. The converted engine can be tuned to have higher power than the original diesel engine by injecting natural gas into the diesel fuel system,
however this has to be done very carefully to prevent the piston burn-out. Its tail-pipe emission contains lower PM10 than the original diesel engine.
– In-use engine condition is highly dependent on the converted engine performance, it depends on the way of use and maintenance.
– CNG quality: natural gas that contains a high percentage of methane will inhibit pre-ignition whereas the percentage of inert gas ie CO2, N2 will affect engine performance.

Not only heavy-duty vehicles were developed for NGV but also light-duty vehicles as well. The history of the development may be tabulated as follow.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

From the above table, we will see that gasoline powered vehicles are much easier to convert to run on CNG than diesel powered vehicles. The injection type conversion with close loop control enhances engine performance and fuel economy more than the

gas-mixer type, but it costs more. Most cars in Thailand have the electronic fuel injection type engines, therefore the injection type conversion seems to be a proper technology for our cars because it can eliminate miss-firing problems. The gas mixer type can be equipped with a pressure relieve device to vent back pressure caused by backfire. PTT is preparing to publish information on all conversion technologies, the engine performance, emissions and costs of each conversion technology. This will be useful information for vehicle owners to choose what conversion technology is suitable for their application and their ability to pay.

In 2003, PTT had PTT R&D survey the feedback from taxi drivers who drove the converted CNG taxis by interviewing 400 drivers whose taxis had been converted by using single point port and parallel injection technology. And another survey in 2004 by Thammasart University interviewed 500 taxi drivers whose taxis were converted by using multi-point port and sequential conversion technology. The results of their satisfaction in percentages are as follows;

 

 

 

 

The above survey results give PTT full confidence in expanding after market taxi and car conversions.

Along with the development of NG vehicles, refueling facilities have also been established to support those vehicles. The corresponding history of NGV refueling station establishments is listed in the following table.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current status of NGV in Thailand

NGV Current Status (July, 2005)
– 34 NGV Service Stations and 10 more stations are under construction.
– 5,200 NG Vehicles (Taxies 4,770 : Passenger cars 327 : BMTA 82 : Royal Thai Navy buses 21)
– 5.8 MMSCFD of NGV Sales Volume (Equal to Gasoline 60 million Litre/ year)

NGV Price now is 8.50 Baht/ kg (as of 15th June 2005) when compared to other fuel on an energy basis.
– 46% of Diesel Price (18.99 Baht/Litre)
– 34% of ULR 91 Price (22.14 Baht/Litre)
– 67% of LPG Price (9.40 Baht/Litre)

Remark : 40.28 Baht = 1 US$

Key success factors for NGV expansion

There are 3 key success factors for NGV expansion;
1. NGV service station network: The network should cover the area where NGV users are. There are Thai regulations for the design and construction of CNG refueling stations which are adopted from international standards. Safety and quality control are of crucial concern. If there were to be any accident, such as CNG tank explosion, this definitely would scare people away from using NGV.
Currently, there is no other company interested in doing CNG refueling station business. PTT is the only company that invests in CNG refueling stations. Almost all current stations are added to the existing conventional fuel service stations in order to reduce investment cost by sharing common infrastructures i.e. rest room,
mechanic shop and convenience store etc. This creates benefits in terms of drawing more people to buy products in convenience stores and mechanic shops. However the incentive for investment i.e. corporate tax exemption, low rate on government land lease etc. is still required to reduce the station cost and attract CNG service station investors.

2. NGV vehicles, conversion kits and refueling equipment manufacturers: Local production will lower costs of these products. However the investors require a certain amount of long term demand to justify their investment, together with some supportive measures such as reduction of import duty for raw materials and equipment used in the manufacturer’s plants. The NG Vehicles should be priced not much higher than conventional fuel powered vehicles. The conversion kit should not be too expensive but capable of maintaining the original performance
when using the converted engine.

3. NGV users: The benefits of using NGV i.e. low price, good after sale/conversion service as well as sufficient infrastructure etc. have to be guaranteed. These will facilitate NGV sustainable development. The Thai government is considering, for NG Vehicles, a reduction in the annual fee for vehicle registration, this would be a
further benefit for NGV owners.

NGV Roadmap

 

 

 

 

 

 

 

 

 

 

 

 

 

There are 2 phases in the implementation of NGV in Thailand Phase 1 (Present – 2008) PTT will expand NGV and CNG refueling infrastructure focusing on the greater Bangkok, provincial areas along the natural gas pipeline route and along super highways. PTT aims to use NGV to replace 10% of diesel and gasoline usage. The numbers of NGV and refueling stations are expecting to be 180,000 units and 180 stations respectively by the year 2008. A new distribution natural pipeline from the new international airport, Suwanapoom airport, to inner Bangkok, Pratum Num area, will be constructed by the end of this year, and will be extended to PTT ‘s energy complex in Ladprao area and toward Rungsit area in the following year. This new pipeline will facilitate the conversion of some existing CNG refueling daughter type stations in inner Bangkok to the conventional type by PTT. A medium size LNG production plant, 25 mmcfd, will be constructed in Rayong province by mid 2007. The LNG product will be distributed to LNG storage depots which will be located in all regions and to facilitate LNG supply to refueling stations throughout the country. At that time, Thailand can become a focal point for creating an Asian “Blue corridor” through adjoining countries, i.e. Malaysia, Singapore, Vietnam etc., to facilitate NG vehicles to run around Asia. The increased number of NGVs will come from both retrofitting in-use vehicles and OEM vehicles. Trucks, inter-provincial buses and pick-ups will be encouraged to convert to run on diesel/CNG dual fuel, while Bangkok city buses will be persuaded to convert to run on dedicated CNG. The existing policy of promoting bi-fuel, CNG and gasoline fuels for cars will be maintained.

Phase 2 (2009 – 2016) NGVs will be promoted throughout the country, the natural gas supply to refueling stations in the areas that have no natural gas pipeline will be in the form of LNG and in the form of CNG where natural gas pipelines exist. The implementation plan to import million ton per day of LNG 5 in the year 2010 is still active. PTT is expecting to have 500 service stations serving 265,000 -503,000 vehicles by the year 2016.

NGV marketing strategy

1. Arrange financial package to support vehicles owners; PTT has arranged NGV card systems to facilitate the collection of loans by the
financing institutions as follows;
– Gold Card : For those who do not have any loan liability, they will pay only CNG price.
– Silver Card : For those who have a loan liability, PTT has joined with SME Bank and the Government Saving Bank to provide an excusive
loan for taxis. Taxi owners will re-pay their loan at 3 Baht per kilogram of CNG every time they refill their CNG tank.
– Orange Card : For governmental organization’s vehicles, PTT pays all the conversion costs for them which are then re-paid at 5 Baht per kilogram of CNG every time the converted vehicles refill with CNG.
– In addition to the above, PTT is studying the possibility of joining with more bankers and financiers to arrange financial packages for trucking service companies and bus / other vehicle fleet owners for their fleet
conversion.

 

 

 

 

 

 

 

 

There will be 4 different bus manufacturers (Hino, Mercedez Benz, Isuzu and Mitsubishi.) and 3 different truck haulers( Hino, Volvo, Daewoo) to be converted to dedicated CNG and diesel dual fuel. All of the converted vehicles will have chassis dynamometer testing for measuring engine power and emissions. After this the vehicles will be released to their operation. The drivers have to report vehicle driving performance to the project. If all the test results satisfy the fleet owners as well as conform to the agreed condition in the MOU, then PTT will promote in-use diesel
powered vehicle conversion up to about 500 vehicles this year.

3. PTT will expand the NGV service station network by constructing more CNG service station along main highways and gas distribution pipelines, and also in industrial estates where natural gas pipelines exist.
– Eastern Part : From Bangkok to Rayong Province
– Southern Part : From Bangkok to Hua Hin
– Central and Northern Part : Bangkok to Kamphangpet Province

Government support measures

The Thai government realizes that utilizing natural gas as an alternative fuel in the transportation sector will reduce Thailand’s trade deficit by reducing the importation of crude oil, and also help to improve air quality. To maximize the advantages of NGVs, the Thai government has not only announced their commitment to NGV expansion on 17th May 2005, but also provided supportive measures as follows:
1. The National Energy and Policy Office (NEPO), a government agency established since 2000, will co-operate with PTT in arranging financial support for vehicle owners, such as
– Loans with special low interest rate and long term repayment for taxi conversion
– Grants to BMTA and BMA for additional cost of purchasing NG Vehicles instead of diesel powered vehicles.
2. Creating price advantages for natural gas by maintaining current pricing structure for refined crude oil products which are imposed with excise tax, municipal tax, oil fund levy and energy conservation fund levy as well as VAT, while natural gas is exempted from any taxes, except VAT. This pricing regime allows natural gas vehicle fuel to be priced lower than any other fuels (about 50% of diesel price).
3. Reducing import duties for NGV as follows
– NGV refueling facilities: compressor 3% , other equipment 1%
– Vehicular conversion kit: Equipment 1%, NGV cylinder 1% for all material types.
4. Reducing excise tax for CNG passenger car from 30% – 40% to 20%
5. Revising existing natural gas powered vehicle regulations to accommodate the latest NGV technologies.
6. Introducing new BMTA buses and garbage collector trucks to use NGV.
7. Developing NGV refueling station regulation.
8. Allocating land for NGV service stations.
9. Setting NGVs as the first priority for natural gas use, especially gas from onshore fields.

NGV Project Highlights in 2005

There are many continuing projects and pilot projects that PTT will implement this year to expand the number of NG Vehicles such as a pilot project for truck tractors/bus/van to use both dedicated and diesel dual fuel technology. This particular aspect will be emphasized in a number of unique highlight projects. Three projects will be explained in detail as follows.
1. CNG in Locomotive Project
As Asia’s first project to use CNG in locomotives, PTT is co-operating with the State Railway of Thailand (SRT) to study the possibility of using CNG in railway engines. A pilot project is set for a train that run between Bangkok and Chonburi by using Energy Conversions Inc. (ECI, USA.) technology to install Cummins KTA – 50L engine illustrated as follows : A conversion kit to be applied to the engines of a locomotive enables them to use natural gas as supplemental fuel, mixing natural gas with diesel (dual fuel). The system is designed to be automated and be capable of
operating the engine without operator intervention. It uses sensors to detect the necessary operational variables to determine when the operation in dual fuel mode is acceptable. The system, of course, may be switched to only diesel mode if desired and is fully fail safe. In the event of power loss it switches the engine to diesel while still generating electrical power. The dual fuel mode of engine operation is nearly identical to the diesel mode.

The switch to dual fuel commences when all of the variables are within proper limits such as minimum level of power and engine speed. The operation starts by opening an automated gas cutoff valve and then positioning the gas flow control valve so that the diesel is reduced as the gas is injected into the engine. The controller continues to monitor the variables and controls the gas to diesel ratio. The controller has a system information screen whereby the sensor readings and control system parameters can be viewed. The controller uses an indicator light to provide “at a glance” status of the system to indicate whether it is on gas. In addition to the engine systems system, a high flow, high Pressure Reduction Skid is used to take the high pressure stored fuel, filter it, reduce the pressure in two stages, provide over pressure protection in case of malfunction and heat the gas with engine water. Gas heating is regulated with a control valve. The PRS is designed to automatically stop the gas
supply to the locomotive under certain conditions. It is designed for 3,600 psi maximum supply, delivering heated gas at approximately 25 psi to the locomotive. It is designed to deliver the necessary gas flow when supply pressure (tanks nearly empty) is only 150 psi. It is designed to be located on the fuel tender car. Along with the PRS are quick disconnect fitting sets for connection of the tender car to the locomotive. The commissioning is expected to be on August 2005.

2. NGV in Fishery Vessel Project. Due to the recent increase in diesel price, natural gas has been viewed as a potential substitute for diesel in the effort to offset the fuel cost increase. In order to demonstrate the possibility of using natural gas in fishery vessels, a pilot project has been implemented. Despite the lack of fueling infrastructure in southern Thailand, 2 small fishing boats are planed to use natural gas in this demonstration project. Current engines in these boats are automotive diesel engines with the power output of around 165 horsepower. Diesel Dual Fuel (DDF) type conversion is thought to be the most suitable method of conversion considering the NGV fueling infrastructure and the risk
of running out of natural gas in the ocean during fishing operation. The conversions will complete in July 2005 and their evaluation will follow.

3. LNG Plant and LCNG Service Station Project PTT are supervising one local company (Cryotech Co.Ltd.) to set up the first LNG plant in Pitsanuloke, 300 km north of Bangkok using gas from Nongtoom Oilfield owned by PTT Exploration and Production Plc.(one of PTT’s subsidiaries). The plant is designed to produce LNG at 16 tons/day by using feed gas at 1.5 MMCFD. The LNG product will be transported in a special truck to the refueling stations, so called “LCNG service station”, that has a vaporizer to change the liquid to gas.

Process:
A conventional absorption process as well as low temperature technology (Cryogenics) will be used to purify and liquefy associated gas from the oil well. Gas containing hydrocarbons and impurities, mainly carbon dioxide, will be treated in a structured packing column and dried in a molecular sieve bed. Sweetened gas will be cooled in a high efficiency brazed aluminum heat exchanger. Heavy hydrocarbons in the gas will be condensed and separated by its boiling point temperature. The condensate is then boiled and washed in tower columns to make LPG. The main gas stream containing methane (over 90 mol%), is further cooled to –155 C and changed to liquid by a cold stream of nitrogen gas created from a cryogenic process known as Nitrogen Recycle System. The product LNG is stored in a double walled vacuum insulated vessel, waiting to be transported by semi trailer truck to the NGV refueling station.

Conclusion

From the above details we may draw conclusions as follows:
1. A good start has been made by installing a sufficient number of refueling facilities to assure vehicle users of refueling convenience.
2. Following the government support measures and commitment, our NGV Roadmap is firmly in place.
3. After a long period of learning, Thailand has accumulated adequate experience and personnel for further development.
4. A fuel price incentive of more than 50% is attractive to vehicle owners for NGV conversions or replacement of their existing vehicles with NGVs. In addition, the reduction of import duties is another important incentive for switching from gasoline or diesel to NGV.
5. With a long history of safety in using NGV worldwide and successful publicity, the public perception has been positive.
6. The success of greater NGV utilization can only be accomplished by cooperation with other relevant organizations.
7. Having been through hardships in establishing NGV utilization, with a series of mistakes, Thailand has become one of the more experienced NGV implementers in Asia.

Commonwealth of Ind. States (Former Soviet Union) Country Report September 05

– First NGVs in 1939
– Large scale programs commenced in 1980
– Six country members of CIS continuing NGV Programs
– Ukraine, Russian and Armenian NGV markets expanding
– CNG price drives CIS markets
– 1,000,000 vehicles, 1,000 fueling stations target for 2020

Background

The environmental and economic advantages of compressed natural gas were understood by Soviet scientists as far back as in the 1930’s. The first CNG filling stations and NGVs were commissioned for regular operation in 1939. Italian engineers were introducing NGVs at the same time. Unfortunately before WW II the USSR could not execute effective NGV programs.

The country returned to the NGV concept only in 1980. The national leadership had resolved to develop and implement a large-scale program aimed at massive substitution of oil-based transportation fuels with natural gas. By the end of 1990 the Soviet Union had built 357 CNG filling stations in all 15 republics. Cylinder and gas equipment production was launched. Compressor equipment was supplied by Russian, Ukrainian, German and Italian companies. In 1990 NGVs consumed 1 billion cubic meters of natural gas.

In 1990 there were 350,000 NGVs in the former Soviet Union (FSU). Three major truck manufacturers – the ZIL, GAZ and KAMAZ plants – were selling OEM NGV trucks. Almost all types of light, medium and heavy-duty gasoline and diesel engines were reengineered to use natural gas. Cars, buses, trucks, railway engines, air and watercraft were using CNG and LNG. Agricultural and stationary engines powered by natural gas were also developed.

In 1991 the Soviet Union gave birth to 15 individual states. Some of them have joined a regional international organization, the Commonwealth of Independent States.

Six country members – Armenia, Belarus, Moldova, Russia, Tajikistan and Ukraine – kept their national NGV programs running. Now let us look at them, country by country, from the smallest to the biggest NGV markets.

Moldova

The number of NGVs and volumes of consumed CNG kept diving from 1991 through 2000. Increasing oil prices have since made natural gas more attractive and the Moldavian NGV market is now growing again.

The price differential between gasoline, diesel fuel and natural gas is the major driving force. There is no dedicated NGV legislation in Moldova. However the price for CNG is favorable (0.18 €/ncm): 42% of diesel and 36% of gasoline prices. This is actually the only incentive for the drivers to switch on to natural gas. NGV related equipment – conversion kits, cylinders and compressors – are imported.

Although Moldova does not produce oil or natural gas, CNG is becoming more popular. Since 1991, five new compressor stations have been commissioned. After 2000 the sales of CNG started growing and have reached the 1998 level of 14.2 Mcm. One may conclude that Moldavian NGV market is still to wake up though.

Belarus

Since 1991 Belarus has built five new CNG filling stations. All compressor stations belong to the ‘Beltransgaz’ company, which is responsible for gas transportation, underground storage and supply to the local distribution companies. All Byelorussian CNG filling stations are linked in to a single computerized data collection system.
In October 2003 the Byelorussian Cabinet of Ministers approved a national NGV program, which aims to triple the number of NGVs by 2010 and build 44 new daughter stations.

Belarus has OEM truck and bus factories and also produces agricultural and communal tractors. This could be a very fertile ground for the Byelorussian gas equipment manufacturer, the Novogrudok plant, which will definitely be part of the national NGV program.

CNG retail price looks attractive (0.25 €/ncm): it is 60 % of diesel and 50% of gasoline. However there is a strong competition with LPG which is rather cheap in Belarus (0.22 € per liter).

Sales of CNG for automotives were sliding down to 26.5 Mcm in 2002. In the past two years we have seen a small growth to 27 Mcm in 2004. The implementation of the national program will hopefully expand the Byelorussian NGV market.

Tajikistan

Unlike Moldova or Belarus the NGV market in Tajikistan is growing very fast. In 1991 there were only 3 CNG filling stations in that country. Now they have 53. Since 1998 – the worst NGV year for the country – the sales of CNG have increased by 23 times from 1.8 to 41 Mcm in 2004.

Tajikistan has very small, almost negligible, oil and gas resources. Domestic oil and gas production covers only 1% and 4% of the national demand respectively. Despite this, prices for motor fuels in Tajikistan are at the same level as in other CIS countries. CNG costs 0.21 €/ncm.

Tajikistan makes neither compressors, nor cylinders, nor gas equipment for CNG vehicles. All NGV related technologies are imported. The country brings in a lot of second-hand equipment.

NGVs make up about 7% of the national on-road fleet. In 2004 an average Tajik NGV consumed a little less than 4,000 ncm per year, which is similar to other CIS nations. The Tajikistan NGV market will keep growing.

Armenia. In the past seven years the Armenian NGV market has increased by 4.5 times. Today every 10th vehicle in Armenia runs on natural gas. Last year they consumed 110 Mcm of natural gas, approximately 4,000 ncm per vehicle.
Armenia does not produce oil or gas. All mineral fuel is imported. Nevertheless, CNG prices stimulate the market: 0.26 €/ncm, which is 61% of diesel and 53% of gasoline. Since 1991 Armenia has built 42 CNG filling stations and today there are 47 compressor stations in that country.

In 2003 there were 28,000 NGVs in Armenia. Current plans are to add 10 thousand NGVs every year increasing to a total of 78 thousand NGVs in 2008. A lot of equipment has to be imported in the near future to Armenia, because there is no domestic production of NGV related equipment. 78,000 NGVs is probably too bold a task. On the other hand natural gas is the only practical solution for a good deal of environmental and socio-economic problems associated with on-road transportation.
One of the more urgent challenges for the Armenian government is to develop and enforce modern NGV legislation and regulations.

Russia. Russia is the second CIS country in terms of sales of natural gas and NGV population. In 1998 a renaissance on the Russian NGV market began. The sales of compressed natural gas for vehicles grow about 20% every year. Last year 45 thousand Russian NGVs consumed 173 Mcm.

Russian industry manufactures all types of NGV equipment for CNG filling, storage or use. However the growing demand could not be met with domestic products.
CNG price is limited by the government and can not be higher than 50% of the low grade gasoline. CNG costs 0.20 €/ncm, that is 46 % of diesel of and 39% of gasoline. The price differential is actually the only market driver. Since last September we have been lobbying the federal government on alternative transportation fuels.

The major role in the rebirth of the Russian NGV market belongs to Gazprom which was maintaining the network of filling stations, financing R&D, promoting the NGV philosophy among politicians and general public. 5,700 company vehicles out of 28,000 are NGVs.

Ukraine. Ukraine is the NGV leader in the former Soviet Union. There are 145 CNG filling stations and 67,000 NGVs in the country. Ukraine holds the 5th place in the world in terms of CNG sales. Last year Ukrainian NGVs have consumed 550 million m3 which is more than in Germany or even in Italy.

Ukraine is a well developed NGV nation. It manufactures cylinders, filling stations and gas transporters. Strangely there is no gas equipment production in the country.

CNG price encourages the individual drivers and fleets to use natural gas instead of gasoline or diesel. Among other drivers of the NGV market is Federal Law on the use of alternative fuels and a National NGV program.

Prices. The prices of CNG in the C.I.S. countries are significantly lower than prices of gasoline or diesel. The price differential is actually the only NGV market driver in this part of the world however, it has been a strong incentive in the past five years.

CNG Sales. In my opinion the amount of CNG sold to NGVs is best market indicator. If there are no systematic official statistics about the NGV population one can not be sure about the accuracy of the real numbers of methane powered vehicles. What we have today are plus/minus estimates. I think that data about actual sales of gas are more trustworthy, because this information is coming from gas transportation & distribution companies.

From that prospective CNG market in the C.I.S. is growing fast. Since 1998 Ukraine and Armenia increased the sales of gas to vehicles by 4 times. Russia has almost tripled consumption of CNG. In 2004 Tajikistan has sold 20 times more CNG than in 1998. Belarus and Moldova are not that fast, but they are on the rise now.

General market analysis. The cumulative data for C.I.S., presented below, convincingly demonstrate the growth of the NGV market after the disintegration of the Soviet Union. We have more CNG filling stations now and sell almost the same amount of gas to vehicles as 14 years ago.

The table below indicates where we were, where we are and where we plan to be by 2020.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NGVRUS invites NGV industry members to GasSUF – The 3rd international specialized exhibition of gas supply and effective usage of gas. http://gassuf.ru/defaulteng.stm

Eugene Pronin,
NGV Branch Head, Gazprom, Russia
Executive Director, NGVRUS, Russia

South Korea Country Report June 05

– NGVs first introduced in 1992
– Buses main class of vehicle, followed by garbage trucks
– Significant price advantage for CNG
– Active Govt support

Natural Gas Vehicles

Natural Gas Vehicles (NGVs) have been operating on South Korean roads since 1992, increasing in number after 1997 due to air quality concerns and the focus on Seoul for the World Cup of Soccer, in June 2000.

Buses form the majority of NGVs on South Korea’s roads, with 6,600 operational currently and another 2,400 due to be introduced by the end of 2005, rising to 20,000 by 2010. 41 garbage trucks are also operational, with this number expected to rise to 106 by the end of 2005 and 800 by 2010. Recently, older diesel trucks servicing other industries have also been retrofitted to Compressed Natural Gas (CNG) or Liquefied Natural Gas (LNG). Conversions of light duty vehicles and cars have also occurred in small numbers.
Natural Gas Vehicles in Korea currently use CNG or LNG, however there are already seven districts where the possibility of LFG (landfill gas or biogas) vehicles has been anticipated. Initial applications for LFG are likely to be garbage trucks.

OEMs currently supplying NGVs (buses) include: Kia Motors (Hyundai Motor Company), Daewoo Bus Corp, Samsung, and SSangyong.

Refuelling Infrastructure

At present there are 97 CNG refuelling stations in South Korea, of which 66 are pipeline or mother stations, with a total of 175 dispensers, and the remaining 31 being daughter stations, with a total of 81 dispensers. The total number of sites is expected to increase to 197 by the end of 2005 and 400 by 2007.

Fuel Pricing

CNG currently enjoys a significant price advantage over traditional liquid fuels and LPG. Fuel prices on a per liter equivalent basis include:

Gasoline 1.1 €/l ($US1.38)
Diesel 0.8 €/l ($US1.00)
CNG 0.37 €/l ($US0.46)
LPG 0.53 €/l ($US0.67)
With operational considerations taken into account, fuel costs for a CNG bus are roughly half those of diesel, 0.17 € ($US0.21)/km as opposed to 0.344 €($US0.42)/km.

Government Policy

The Korean government plays a direct, active and important role, including providing fiscal support through a range of different projects. The main projects include G-7 (G-8) project, Eco-Technopia 21 project, Investment Plan for the Eco-Technopia 21 Project, Major Outcomes of Eco-Technopia 21, Corporate Environmental Management, and Environmental Industry.

(Details of these can be found here)

Government initiatives to support NGVs and reduce emissions include:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NB – At time of publishing $US1 = 1,200 Korean Won

More information available at www.kangv.org and www.angva.org

Italy Country Report April 05

– NGV numbers continue to rise in Italy
– Increase in OEM participation and quality of aftermarket conversions
– 360-370,000 NGVs on Italy’s roads serviced by 510 refuelling stations
– CNG bus orders surpassing diesel buses
– Cylinder Exchange System maintains cylinder safety
– Govt programs supportive of continued growth

Number and types of natural gas vehicles

Italy, the “country of natural gas” has seen a rise in the NGV numbers in the past couple of years, due to a) a clear decision by the main car manufacturers to go into the NGV business, and b) aftermarket manufacturers being successful in complying with the new stringent Euro 4 and OBD regulations.

Aftermarket conversions rose to 30,000 in 2004, increasing 20% over the previous year, and the OEM cars and commercial vehicles were about 12,000, double the previous year. Thanks to the wide spectrum of models and to the good quality of Italian NGVs, sales for the start of 2005 are again double 2004 levels. The total number of NGVs is presently about 360-370.000 in Italy, the percentage of such vehicles being about 8% in the more “methanized” areas.

CNG urban buses are also proving successful in Italy and today number about 1,200, spread over almost 50 towns. In 2004 the number of CNG buses ordered was higher than diesel buses! Heavy duty trucks for garbage collection and downtown delivery are also available but their uptake is currently slower than expected.

Number and types of refuelling stations.

Refuelling stations have grown from 370 at the end of 2001 to more than 510 by the end of 2004. Thanks to the government and to the support of local authorities (see below), it seems that the chicken and egg cycle has been broken by the filling stations. Total gas sold for transportation is in the range of 440-445 million cubic meters per year, increasing slowly over time.

What is still missing in Italy is the allowance of self-service refuelling, in spite of the permission for such systems all over Europe.

The use of vehicle refuelling appliances (VRAs) is practically unknown, (the installation constraints being the same of the big stations) and actions are under way to alter the requirements in the legislation.

Price of CNG

CNG street price is now in the range of 0.7 €/kg, comparing with 1.25-1.30 €/kg for diesel fuel and to the 1.45 €/kg for gasoline, thanks to the very low excise. This is deemed by the authorities to be a primary incentive for the use of natural gas.

Cylinder Exchange System

Italy also has a unique CNG cylinder exchange system, operated by ENI, a majority Govt owned company, which is proving useful for maintaining safe cylinders throughout the country. Users purchase cylinders when they purchase or convert their vehicles. After 5 years the cylinder is exchanged for one which has already been inspected. R110 compliant cylinders are given a visual inspection while still in the vehicle. Cylinders that don’t pass inspection are destroyed. A surcharge of €0.015-0.02 per kg of CNG sold covers associated costs.

Government involvement and support

The first weeks of 2005 were very dry in Italy, and the particulate content of urban air rose well above the allowable limits, pushing local authorities to a) favour the use of natural gas (and of LPG) with incentives and b) restrict the circulation of older vehicles in urban areas.

There is presently a wide range of subsidies for the erection of natural gas filling stations, for both private fleet and public use. There is also a wide range of incentives for buying new gas vehicles. These go in parallel with the traffic restrictions for which gas vehicles are exempt.

Prospects for the NGV industry

The NGV industry is ready to follow this expansion in Italy, but also has very big business opportunities in the rest of the world, thanks to its quality. Italian equipment and components are sold in South America, in the Far East and in Russia. Some Italian companies are better known abroad than in Italy.

Overall assessment

Looking back to the last few years, signs are evident that the NGV business has started to grow seriously in Italy, thanks to the government support and traffic restrictions for the liquid-fuel vehicles, and thanks to the decision of national vehicle manufacturers to commit to natural gas vehicles.

What is still at the early stages is the task of educating the general public about NGVs but this situation is changing also as new communication campaigns have just started.

NGV Italy: www.ngvitaly.com/

Colombia Country Report October 04

– More than 35,000 NGV’s -Over 80 refuelling stations -Anual consumption amounts of 60 million+ cubic meters of gas -Steadily growing sales of 20% per year -Natural Gas used in all vehicle types.

NGV in Colombia

History

Colombia’s experience with NGV dates back to year 1984, when PROMIGAS S.A., the oldest private Colombian company in Latin America in natural gas transportation and distribution, installs the first NGV stations and conversion shops in the Atlantic Coast, in order to offer their customers an alternative fuel that would provide them a higher economy and operation security, and would additionally contribute in the reduction of the high pollution indexes that are affecting the environment. This is how the project started with public transportation, specifically with fuel powered buses, and slowly developing the initial conversion processes. At the beginning, many difficulties were found in order to convince fleet owners and managers of the product’s benefits. At the end of year 1999, gnc S.A. is established as a stand alone company, with the purpose of speeding up the business and making it grow all over the country. The arrival of natural gas to other country areas has allowed the business to have a satisfactory development in Bogotá (capital city), to the East and West of Colombia South America.

 

 

 

 

 

 

 

 

 

 

 

 

 

Today, natural gas in Colombia is considered as an alternative fuel, not only for heavy vehicles as buses that consume large amounts of fuel, but also for small vehicle fleets such as taxicabs, vans, automobiles, etc. This is how other markets are being attended in the Atlantic Coast as well as in the inner zone of the country nowadays.

Since the late 1990’s till today, 80 new service stations have been built in Colombia in 16 different cities, and around 35.000 vehicles are now operating with natural gas, reaching consumption amounts of 60 million cubic meters of gas during 2003, which replaced the equivalent consumption of approximately 56 million gallons of fuel, and sales have been growing steadily 20% per year during the last three years.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The expectations for 2004 are to increase the market penetration of taxicabs and individual vehicles by building new service stations through all the Colombian territory, with which the leadership in the national market is consolidated. In addition, it’s expected a 100% growth in conversions according to 2003 accomplishments and it’s projected to sell 27% more than the registered during the same period.

 

 

 

 

 

 

 
At the present time, gnc S.A. is the national leader in the NGV business, with NGV service stations in the cities of Barranquilla, Cartagena, Santa Marta, Montería, Sincelejo, Guajira, Bogotá, Cali, Armenia, Medellín, Tuluá, Pereira and Palmira. Of today’s existing 35.000 vehicles, 50% were converted in the last two years as follows:

 
The converted motor park market distribution in Colombia is conformed mostly by automobiles, most of them cabs with 42%, urban buses with 26% , vans and jeeps with 27% and trucks with 5%.

 

 

 

 

 

 

 

 

One may emphasize that the transport sector is constituted as the second important one over the total energy consumption in Colombia, with an approximate market participation of 31%; and also the largest atmosphere pollutant. Because of this, its participation in the national energetic basket and its effect over the economy, make it the main goal to guarantee an optimal energetic resource use in a medium term, wanting to achieve, among others, the following objectives:

• Cut off fuel consumption,
• Increase energetic efficiency,
• Reduce pollution,
• Diversify the fuels offer and
• Strengthen the commercial balance through the diminution of energy imports. The private natural gas industry sector in Colombia is one of the most dynamic ones, and with a strong potential for development in the country, due to large private investments, to the support of the national government and the development of a vast infrastructure.

1. NGV Consumption

The National Government reckons that with right market signs, the NGV program in the main cities of the country might increase its weight in the national energetic basket. Likewise, it will pass from having 2.2% of the total natural gas demand to 8.5% of the total estimated demand of this fuel for year 2010, achieving the economical and environmental benefits that the country needs. NGV’s participation in the total national consumption of natural gas during the year 2003 was 2.2%, which represents a 26% increase in NGV consumption regarding year 2002, due to an increase of 10.000 vehicles converted during 2003. To this phenomenon is added the great existing natural gas reserve availability (7,489.7 GPC3), that at a supply rate as the one had in year 2003, 573 MPCD, will provide available reserves for 34 years.

It must be acknowledged that exploration activities have decreased during the last few years and that will probably force us to buy international priced petroleum from the next years on. The reserves of our neighbor Venezuela establish a warranty for an eventual compliment of our actual reserves. It is then evident to conclude that there is an existing natural gas reserve availability for a successful development of Natural Gas Vehicles in Colombia.

2. Massive Transportation

As a result of the successful experience with the Transmilenio system in the city of Bogotá, Colombia’s main cities are willing to reorganize their public transportation system and offer into service integrated massive transportation systems with buses operating at surface level. Taking to account that the petroleum reserves let us have a 4-year self-sufficiency and due to the quality of the fuel produced in Colombia, the government is encouraging people to use natural gas as an alternative fuel for their vehicles. For this purpose it issued the October 2003 2988 Decree through the Ministry of Energy and Mines, that makes the operators of this projects consider the international price for Diesel (without subsidies). It must be said that Diesel fuel had a 60% subsidy, provided by the National government. Today this support goes down to 40% and it is expected to decrease gradually till it is totally eliminated in December 2005. It has been proven that the pollution emitted into the environment and the noise levels produced by natural gas vehicles are amazingly less than those produced by equivalent Diesel powered engines. The buses required for the future projects that are being developed for the cities of Cali, Barranquilla, Cartagena, Pereira, Medellín and Bucaramanga, and the future extensions of Transmilenio goes over 1.000 vehicles. The following buses with natural gas powered engines are available in Colombia today: Since the end of year 2003 an Ikarus articulated bus, with natural gas engine, has been operating in Bogotá-Colombia in one of the Transmilenio system routes, with excellent results from both technical and economic points of view.

 

a) Articulated Bus, Ikarus (160 passengers) Since the end of year 2003 an Ikarus articulated bus, with natural gas engine, has been operating in Bogotá-Colombia in one of the Transmilenio system routes, with excellent results from both technical and economic points of view.

 

 

 

 

 

 

b) Feeder Bus; Mercedes Benz OH-1623-LG (110 passengers)

 

 

 

 

 

 

 

 

a) Articulated Bus Chassis; Renno 280 GA (160 passengers)

 

 

 

 

 
b) Articulated Bus Chassis; Renno 280G (110 passengers)

 

 

 

 

 

 
c) Renno mid-size bus 255-G (30 – 40 passengers)

 

 

 

 

 

 

3. System driven Operation

Nowadays, several cities of Colombia such as Barranquilla, Cartagena, Santa Marta, Sincelejo, Montería, Neiva, Bogotá, Bucaramanga, Cali, Medellín, Armenia, among others, are using natural gas in approximately 35.000 vehicles, especially in public transportation.

Taking this to account, the competent authorities and the industry itself have identified the need of creating legal and technical regulations, guided so that every natural gas converted vehicle can be provided with fuel at any place of the country, under the fundamental premise of minimizing the possible security risks of the customers and the public in general. Many of these risks are present in the usage of any type of fuel, and, if not managed in the right way, may cause accidents affecting the development of the industry’s activities. The Colombian companies gnc S.A. and Gas Natural S.A. have been pioneer in the implementation of an automated sale control system in its entire refueling stations network. It is called “Joint Information Unique System (SUIC in Spanish)”.

 

 

 

 

 

 

 
Through this system, any operation risk or the possibility of existence of a human error is minimized. Every vehicle has installed an electronic identification system that is qualified by the certifier at the time the conversion takes place and requalified during the car’s annual inspection. The system identifies the customer’s recorded information with an electronic device (Chip) and authorizes the fuel supply.

Several programs have been developed through this system:

-Settlement and sales administrative control (in cubic meters)
-Annual and 5-year inspection due date control
-Settlement and fuelling free collection of the conversions financing
-Sales and fidelity plans for frequent customers
-Customer post sales report: consumption per vehicles report, refuelling hours, consumption per service station, etc

The system allows vehicle identification and control of the complete NGV equipment for the annual and 5-year checking so that such vehicles are not supplied with fuel if the chip notices that it has not had the proper revision control. The Colombian NGV Industry remarks the adopted dispositions on the subject as a mean that will help guarantee security and create a quality culture around the NGV business.

4. National Government Support

After being proved by the private sector that natural gas is not only an alternate fuel for engine vehicles, but that represents a real substitution option for more expensive traditional fuels (subsided and less friendly with the environment), the industry of NGV will for the first time count with the means that allow it to take natural gas as fuel to many more users in different cities of the country. This support (NGV massification program) includes the cutback of taxes in the conversion kits, elimination of mechanic shops and service station implementation procedures, and the elimination of traditional fuel subsidies. Besides, the government is conscious of the favor this would do to the country’s economy by finding a substitute for fuel imports, with the consequent foreign currency savings. Essentially, these instruments are the incentives regarding the commercial discounts to those new clients interested in converting their vehicles to natural gas fuel that could be provided today. This discount is the result of an alliance between the producers (Colombian Petroleum Company ECOPETROL-Government and CHEVRON TEXACO), conversion workshops, transporters (ECOGAS), fleet owners, dealers and marketing managers, among those gnc S.A., and the purpose is to offer incentives in order to increase the NGV conversions and as a consequence, NGV consumption. There are proposals to promote the use of natural gas in public transportation with vehicle parts that could be made in Colombia. It is not a secret that a greater use of natural gas increases economic global competitiveness by means of a diminution of transportation costs.

5. The future of NGV in Colombia Conversion Goals

According to the established goals for the next five years, the NGV program in the country estimates the conversion of nearly 200.000 new vehicles that constitute the actual potential market.
Service Stations

It is expected to build 200 new service stations during the next 5 years, in order to reach a total amount of 280 at the end of the year 2010, which represents investment needs of US$ 550.000 per station.
Conversion Shops

Mechanical workshops constitute a fundamental element in the development of the program because their job is to assure the security and safety during the vehicle maintenance. The number of workshops to build depends on their own average conversion capacity, and it has been calculated in 50 units per month. There are around 20.000 new conversions expected for the present year, which will require an amount of approximately 70 workshops. Nowadays, the country has the necessary infrastructure to double the actual conversion rate.

 

 

 

 

 

 

 

 

 

 

It can be concluded then, that the massive natural gas program will have a considerable advance during the present year, achieving important economic and environmental benefits for the country. A new era is opened for this energetic today in Colombia; after 20 years, we are still successful in public fleet transport: taxicabs, large and mid-size buses.

Iran Country Report October 2004

The first activities to use Natural Gas in transportation in Iran have been started since 30 years ago. At first LNG was chosen as an alternative fuel but because of impact of LNG providing, the government could not continue this program. In the recent years, economic and environmental problems, which were caused by gasoline and diesel vehicles, have made the government to seek for a green and more economic fuel. Technical researches show that CNG is the best option for Iran. This paper describes Iran NGV roadmap from economic, environmental and technical points of view.

NGV reservoirs of Iran

Evaluation of natural gas reservoirs of Iran shows that 16 percent of the total amount of natural gas reservoirs of the world, exist in Iran [1]. This means that 26.6 trillion cubic meters (over 900 trillion cubic feet) of natural gas are discovered which makes Iran the second ranked country in the world, having great natural gas reservoirs. But the amount of extraction and production of NG is not proportional to reservoirs content. With extraction of 55.6 million cubic meters of NG at 2000, Iran has the 11th place in the NG producer ranking [2]. Considering the ratio of extraction rate by the amount of reservoirs, which is 0.02 percent, Iran has a good potential for natural gas development. It has been considered to increase the amount of NG production in the coming years. So the government has invested widely in developing natural gas discovering, extraction, production and distribution.

The reasons of choosing CNG Economic reasons

Fuel consumption of vehicles in Iran is so much in comparison with other countries. Figure 1 shows the average fuel consumption per day of the vehicles in some countries [3]. This is the most important point that makes the government to substitute an alternative fuel by gasoline and gasoil. In the year 2004, fuel consumption of transportation equaled to 56 million litters of gasoline per day. The government has to import 34 percent of this amount of gasoline from other countries which are competitors of Iran in oil industry. Also the government paid 3.1 billion USD for fuel subsides in this year. Figure 2 shows amount of gasoline production and consumption in transportation [4]. Prediction shows that in the period of 20 years (2001-2021) total shortage of gasoline would be equal to 521 billion litters. So considering the huge contents of NG reservoirs and also low price of NG fuel in Iran (3 cents per cubic meter), natural gas is chosen as a suitable alternative fuel. Although the specific fuel consumption of NG engines is less than similar gasoline engines, if we consider them to be equal, economic advantages of using natural gas instead of gasoline would be about 4.5 Billion USD in the year of 2004. Table 1 shows economic evaluation of converting different kinds of vehicles to NGV [5,6]. In addition, more than 2.5 million gasoline and diesel on-road vehicles in Iran have been produced based on old technology. So it is necessary to substitute these inefficient cars with new ones. Government can achieve three goals by using NGV technology. First it can decrease fuel consumption. Second it can replace the old vehicles by the new ones. Third it can save a huge amount of economic resources by decreasing gasoline imports.

 

 

 

 

 

 

 

 

 

 

 

Because of geographical dispersion of cities in Iran, construction of natural gas infrastructures (including extraction, refinement, transfer and distribution) requires large amount of investment. So the government has not chosen natural gas as a main fuel, but as an alternative fuel.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Because of environmental considerations NG is known as a green fuel in Iran. Generally natural gas fuel produces less emission than gasoline and gasoil. Figure 3 shows the amount of emission of different burned fuels. As can be seen most of the pollutants, especially SOX and CO, decrease by using natural gas. Most of the big cities in Iran (like Tehran, Isfahan, Mashhad and Shiraz) are suffering from air pollution and this has caused a lot of economic and human damages. Table 2 shows the human damages cost in Tehran and Figure 4 shows statistics of deaths in Tehran due to air pollution [9] Using NG could decrease these damages by decreasing the pollutants, especially PM10, CO and SOX pollutants. The emission of diesel engines of public transportation fleet is so much due to old technology. Also produced diesel fuel contains so much sulfur which causes SOX emission and corrosion problems in engine. So by using NG in public transportation many advantages are achieved.

Promotion programs

In order to insure the progress of using of natural gas as an alternative fuel, the government has established an organization named IFCO (Iranian Fuel Conservation Organization). IFCO is responsible for programming and managing the progress of using natural gas in transportation. Also the Department of Environment, that plays supervisory role in natural gas executive programs, is one of the key role players in this progress. The main role of IFCO is to balance between cost, conservation and environmental considerations in the progress of substitution of natural gas. IFCO has provided “NGV Master Plan for Iran” which contains all steps and details of NGV promotion program in Iran. NGV master plan for Iran has six main subjects: 1- Feasibility study 2- Conversion Policy 3- Macro and micro economical evaluation for a large NGV conversion program 4- The method of investing for earning investments 5- Conceptual design of filling station and vehicle systems 6- Basic and detail design of filling stations Overall conversion policy including 3 phase: introduction, development and mature phase. Executive policy for using natural gas instead of gasoline and gasoil is based on four axis: • Manufacturing of heavy and light duty NGVs • Converting gasoline and diesel engines to natural gas engines • Providing CNG for manufactured and converted NGVs • Supporting NGV customers Natural gas promotion program is based on using Compressed Natural Gas (CNG). This program would not seriously include other forms of natural gas fuels (like LNG and LPG), because of technological and economic reasons. The followings describe main points of natural gas substitution program.

NGV Technology development

Number of CNG stations in Iran does not satisfy number of NGVs. So it is very important to convert them as bi-fuel engines, which can use both gasoline and CNG fuels. As a result, one of the important parts of natural gas substitution program is installing gas kit on gasoline vehicles. The development of bi-fuel technology depends on working and researching in the field of CNG tanks, natural gas ECUs, catalyst converters and gas injectors. In the field of public transportation fleet, the manufacturers have produced CNG buses and these buses have been successfully in service in recent years. Dual fuel engines are the second choice instead of diesel engines. As an example OM355 engine (which is the diesel engine of so many buses in Iran) was converted to dual fuel engine and tested successfully. Converting gasoline engine of taxies to Bi-fuel engines is another phase of public transportation fleet project. There are some reasons that prevent to develop natural gas dedicated engines technology in Iran. One of them is the economic and technological impossibilities to manufacture a huge amount of natural gas dedicated engines in a short term program. The other one is lack of fuel stations, especially in highways. So the process of producing NG dedicated engines is not a primary solution. Some powertrain research and development centers in Iran, like IPCO (Irankhodro Powertrain Co.), have projects to design and produce dedicated natural gas engines. But Results of these programs would be used in the future.

 

 

 

 

 

 

 

Manufacturing programs to produce NGVs It has been planed to produce CNG vehicles in car manufacturing companies. IKCO (Irankhodro Company) and SAIPA which are the main car manufacturers in the country, are working on some projects to produce NGVs. Also in order to provide CNG buses for public transportation, Irankhodro Diesel Company (the main bus manufacturer in Iran), is producing CNG buses. Figure 6 shows the capacity of OEMs to produce new CNG vehicles in the coming years [10].

Governmental programs

According to the NGV master plan, by the year of 2020, 46 to 70 percent of the total vehicles in Iran must be NGVs and 2950 to 4500 fuel stations must have been constructed. Followings are the abstract of the activities which are done in order to ensure the achievement of these goals.
Substitution of on road vehicles by NGVs

Conversion of gasoline and diesel engines to NGVs is the most important part of natural gas substitution program. In NGV master plan for Iran, it has been planed to have 650 thousand NGVs. Half of these NGVs would be converted and other half would be produced. The conversion is done in conversion workshops. These workshops are constructed by the cooperation of government and private section. There are three categories of conversion workshops. The first one is specially for converting diesel engines. The second one is for mini-buses and in the third one, cars and vans are converted. Table 3 shows the number of converted different types of vehicles up to May 2005 [11].

 

 

 

 

Public transportation

It’s very important to substitute public transportation fleet vehicles by NGVs in a short time, because of environmental advantages of using CNG in these vehicles. So it has been planned to construct special conversion workshops for these vehicles. Also specific fuel stations are being constructed to improve the fueling of public transportation fleet NGVs. Table 4 shows the number of taxies, buses and mini-buses which must be converted in Tehran up to year 2006. 66 percent of the total converted cars in public transportation fleet are taxies. These taxies are converted to bi-fuel. 33 percent are buses and minibuses which are converted to CNG engines.


 

 

 

 

Fuel stations

The first phase of NGV master plan is based on constructing 480 CNG fuel stations in Iran. It means one fuel station for every 1600 NGVs. Figure 7 shows the considered number of stations needed in CNG program [12]. Construction of fuel stations is also done by the cooperation of government and private sections. Table 5 shows economic costs evaluation of constructing CNG fuel stations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Private section support

The government is supporting the private section in order to improve the capacity of this section in NGV technology. Followings are some examples of these supports: • The conversion workshops, in which vehicles are converted to NGVs, are constructed by the cooperation of government and private section. • The government supports the private section to construct fuel stations. • R&D organizations which work in the field of fuel tanks, stations and NGV technology are supported [13].

Subsides

Subsides are the most effective tools of the government. This tool can ensure that the consumers will choose natural gas instead of gasoline and diesel. The government pays subsides for converting on-road vehicles to NGVs. So each person by converting his car to NGV, will pay 15 percent (55 USD) of the total cost of conversion. Also the government has decreased the gasoline subsides and as a result the consumers would like to use CNG fuel instead of gasoline. (the cost of CNG is ¼ of the cost of gasoline)

Public Education

As the changes occurred in the environment are related to human’s behavior, so it plays an outstanding role in energy consumption and environment saving programs. That leads the government to pay a great attention to public educations, as well aseconomical and technical aspects and apply the foreseen budget changes in the third development program. IFCO, with the help of National Iranian Oil Company (NIOC) has made vast propagandistic activities in order to conduct public attentions to fuel conservation and specially replacing natural gas, as a green alternative fuel, with other kinds of fuel. These activities include all means of mass media; carrying on related gatherings and seminars especially annually conferences on “Clean Air Day”. There are some examples of these programs: • First Energy Consumption Optimization forum in vehicle industry, October 2004 • First forum of alternative fuel (CNG) and natural gas vehicles (NGV), May 2004 • International Environment exhibition of Tehran, July 2004 • CNG exhibition, February 2005 • 8th International exhibition of Oil, Gas & Petrochemical Industries (IOGPE), Specified in Gaseous conversions • International vehicle exhibition of Tabriz • Second International forum of Internal Combustion Engines, January 2002 IFCO has also made a specified section for children in different ages which make them able to play games or puzzles and read subjects which educates them proper energy consumption from early ages.

Environmental

There has been a need for supervisory organization, which is independent from other organization of government, to guarantee the quality and quantity of the performance of government plans. Department of Environment in Iran is responsible for this important task. In addition, Department of Environment must specify and declare necessary pollution limits and standards, in order to control the air pollution. By means of this power, Department of Environment is the policy maker of air pollution control in Iran and could enforce the manufacturers to produce NGV and impel the consumers to use CNG vehicles. This organization is the supervisor of vehicle converting and substituting programs.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

Generally research and development activities in Iran are too weak and university researches could not properly be transferred to the industry. In the recent years, researches on NGV materials extensively increased both in universities and industries R&D section. University researches mainly focused on [14]: • Dual fuel natural gas engines • Bi-fuel NGV • Gas injection simulation and analyses • CNG tank • Technical, Economical and environmental assessment of NGVs production In the industrial filed, IPCO (Irankhodro Powertrain Co.) is the leadership of research and development in the filed of internal combustion engines so various projects related to NGV are run there, like design and manufacturing of dedicated natural gas engine and design and production of ECU for bi-fuel engines. Some car manufacturers recently established a center to do research and development on NGV especially on NG engines.

NGV market in Iran

Comprehensive NGV promotion programs, as mentioned, require huge investments. The more important fields that investments were focused are: • Extraction and distribution facilities • Fuel infrastructure and CNG fuel station including NG compressor, piping and sealing, fueling facilities and measurement and controlling devices • New NGV producing by OEMs • Converting equipments like gas kits and CNG tanks’ Figure 8 shows required annual investment for NGVs manufacturing and converting and CNG filling station in the period of 20 years. Based on presented data, Iran could be a great market for NGVs related materials. Although the most required equipments were imported from other countries (especially Italy, Germany, Denmark and Canada), some of these are planned to be manufactured in Iran under the license of original manufacturer. For example production line of some fueling facilities would be utilization by the help of a foreign partner in the near future. Based on information from IFCO contracts have already been signed for a ramp start of phase 1 of NGV master plan, indicating a total number of NGVs in the first fiveyear period of 1 million OEMs and 900,000 conversions. This will imply some 2,000 filling stations in five years [15]. This tremendous build-up cannot be done with Iranian products due to lack of domestic production of the required equipment. Hence, the rapid increase of the NGV business in Iran will create a huge demand of equipment in the world market. Worldwide production capacity should also be considered. Long-term agreements with major suppliers will be required [16,17].

 

 

 

 

 

 

 

 

 

 

References 1- World Energy Council, “Survey of Energy Resources 2004”, “Crude oil and natural gas liquids”, 2004 2- See Ref.1 3- IFCO, “NGV Master plan for Iran”, “CNGV Conversion Policy and Statistics”, 2002 4- See Ref.3 5- IFCO, “NGV Master plan for Iran”, “Macro and micro economic evaluation for large conversion programme“, 2002 6- IFCO, “NGV Master plan for Iran”, “NGV feasibility study”, 2002 7- See Ref.5 8- See Ref.5 9- Department of Environment, “Comprehensive economic evaluate of human damages caused by air pollution in Tehran”, Dariush Farhoud (Executive manager), Final report, September 2002 10- See Ref.3 11- IFCO, “Weekly Analytical statistics of converted vehicles in workshop conversion section”, May 2005 12- See Ref.3 13- See Ref.3 14- Iranian Information and Documentation Center database (website address: http://www.Irandoc.ac.ir) 15- See Ref.3 and Ref.5 16- IFCO, “NGV Master plan for Iran”, “Conceptual design of filling station and vehicle system”, 2002 17- IFCO, “NGV Master plan for Iran”, ”Basic and detail design of filling stations”, 2002