On April 6, a seminar on developing a CNG-fueled public transportation fleet in the region took place in Ho Chi Minh City (formerly known as Saigon, the commercial and industrial center of South Vietnam). The event was organized by the Ho Chi Ming City local government's Department of Transport and Samco (Saigon Transportation Mechanical Corporation).

It was announced at the seminar that from 1 July 2017, all public transportation in the city will comply with the Euro 4 emission standards. A total of 1,680 new buses will come into service, which is expected to create favorable conditions for boosting investments in the machinery industry.

The participants in the event noted that 2,700 buses are currently operating on 137 routes in Ho Chi Minh City, of which only 137 are fuelled by CNG (5%). The majority of these buses are old vehicles that run on diesel fuel and produce a lot of air pollution.

Ho Chi Minh City, the largest city in South Vietnam with a population of over 7.5 million, is now facing serious transportation problems as its public transportation system only meets 10% of the current demand.

BACKGROUND

CNG, or compressed (condensed) natural gas, is used as motor fuel instead of petrol, diesel fuel or propane. It is cheaper than conventional fuel, and when combusted it results in substantially less environmental damage than traditional fuel types.

In 2012, Vietnam offered to establish a joint venture with Gazprom International, Gazprom’s sole specialized operator of energy projects outside the Russian Federation, to develop a fleet of city buses that are fueled by natural gas, as well as to build a network of gas-filling compressor stations.

The parties then agreed to start expert bilateral consultations with the aim of eventually developing a feasibility study.

In October 2015, a trilateral Russian-Vietnamese venture for NGV fuel was registered in Ho Chi Minh City. The principal objective of this joint venture is to implement LNG production and NGV fuel projects in Vietnam.

PVGAZPROM NGV was formed by Gazprom International (35.5%), Gazprom Gas-Engine Fuel LLC (35.5%) and PETROVIETNAM GAS (29%). The objectives of the joint venture include the construction and commissioning of natural gas liquefaction units, cryogenic and multi-fuel filling stations, refueling terminals for water transport; LNG delivery, storage and regasification systems; vehicle re-equipment and technical maintenance points, and other gas-engine infrastructure objects for servicing vehicles and machinery fueled by natural gas.

The southern part of the Republic, with the largest natural gas fields in the country and a developed energy infrastructure, will be the starting point for the project which will be implemented by PVGAZPROM NGV.