A nationwide CNG infrastructure for vehicles

1. A nationwide CNG infrastructure for vehicles Conference on Innovative Uses of Gas Brussels 24 June 2011 - Flavio Mariani – eni Gas & Power

2. Content • NGV market • CNG infrastructure needs • Options available • Involvement of eni in the NGV sector

3. NGV market

4. The world NGV champions Total NGV in the world: 13.2 million Total refuelling stations in the world: 18,700 PAKISTAN Total CNG vehicles: 3,500,000 i.e. ~ 80 % of the national fleet. Refuelling stations: 3,300 BRAZIL Total CNG vehicles: 1,640,000 i.e. ~ 5.0 % of the national fleet. Refuelling stations: 1,780 IRAN Total CNG vehicles: 2,070,000 i.e. ~ 11.0 % of the national fleet. Refuelling stations:1,540 INDIA Total CNG vehicles: 1,100,000 i.e. ~ 8.0 % of the national fleet. Refuelling stations:600 ARGENTINA Total CNG vehicles: 1,900,000 i.e. ~ 23.0 % of the national fleet. Refuelling stations: 1,880 ITALY Total CNG vehicles: 740,000 i.e. ~ 2.0 % of the national fleet Public fuelling stations:>800 (as of June 2011) Source: The GVR – Gas Vehicles Report (February 2011)

5. CNG refuelling stations and NGV in Europe Black: CNG service stations Red: Vehicles/000 8 0.1 4 0.1 250 100 130 23.2 4 0.3 25 5 67 2.8 33(p)0.5 2 0.1 33 2.1 900 90 9 0.3 45 2.5 280 200 8 0.6 220 5.3 Total NGV in Europe: 1.3 million Total refuelling stations in Europe: 2,700 3 0.1 125(p) 10.1 1209.3 1 0.1 80 60.0 >800 740 44(p) 2.5 3(p) 0.6 60.4 14 3.3 Source: E.N.G.V.A. – G.V.R. (February 2011)

7. Refuse Trucks & Urban buses European CNG Success Story HD vehicles: a starting point In Europe, the number of heavy urban vehicles, buses and garbage collection trucks, using CNG/biomethane is growing. But the high infrastructure investment costs are slowing down the development. CNG Urban buses in Europe (+Turkey, Russia)

8. CNG infrastructure needs

9. Methane (CNG). A reality and mature technology Minimum infrastructure needs LDV/HDV • 1. In cities (LDV/HDV): • „Methane (CNG) should be promoted as one of the main alternative fuels in HDVs in urban transport“ -> European cities should aim for at least 50% Methane share in their public fleets. Methane should be offered in at least 10% of all publicfillingstations (private customers). • 2. On medium/long distances (HDV): • Methane (LNG) is the most promising alternative way for heavy goods vehicles on medium on long distances. LNG refuelling needed at least every 400 km.(LNG Blue Corridors) • 3. Alongside Motorways (LDV): • - 25% of filling stations along motorways, at least every 150 km Methane refuelling needed (private & commercial customers) pictures: selection of current OEM offers 9 9

10. bottlenecks • Need for harmonised CNG infrastructure across Europe. • More developed CNG infrastructure from North to South • Few stations in some countries like France and Spain (mainly public urban fleets of CNG buses and garbage collection trucks) • Main Bottleneck: • High investments costs (approx 400.000 € for public stations and 1.000.000 €for depot stations for e.g. urban or commercial fleets). Same investments for L-CNG stations, lower maintenance costs. picture: GasHighWay Investments made by the European industry of 1,5billion € already! Twice as much needed at least to guarantee adequate refuelling conditions: EU Infrastructure Fund for Methane 10 10

11. Cost of refuelling stations (example; average conditions ) • Cost of a 400 – 600 m3/h flow rate public refuelling station - high intake gas pressure (>10 bar)= 400,000 € • Compressor (35-40% of overall cost, including part of the piping)= 180,000 € • Storage (3,000 Sm3; 250 bar ~100 cylinders, 100 l each)=25,000 € • Piping and fittings = 20,000 € • Dispensers (two; double hose) = 60,000 € • Ancillaries, canopy = 25,000 € • power supply system, if needed (in case of high voltage) 60,000 € • Buildings, digging, plinths, fence = 30,000 € • Land, bar, shop, workshop: no cost atributable to CNG; usually nowadays they are available already in the liquid fuel refuelling station where CNG is to be included • Cost of a 1,000 – 1,500 m3/h flow rate private refuelling station - high intake gas pressure (>10 bar)= 1,000,000 € • The European NGV industry spent so far 1,5 billion € to develop the CNG refuelling station network, but more than twice as much would be needed to get a reasonable network development • Developing a CNG refuelling station network is a challenge: the cost of a CNG service station is two – three times as much as that of a gasoline/diesel/LPG service station. • The pay back time is longer, thus higher operative margins are needed.

12. Optimum characteristics of a public CNG refuelling station • Flow rate: > 300 m3/h i.e. small (cheap), but not too small • Dispenser: at least two double hose (refuelling 4 vehicles at a time) • Cascade storage (multiple pressure levels) with sequencing panel • Good break-even between compressor and storage size • Modular approach: one, then another module, to follow the market • Temperature compensation = safety, and more customer satisfaction • Self-service = cheaper, more sale points, more service hours, more gas sale, more customer satisfaction, more perception of CNG as normal fuel • Multi-dispenser= more customer satisfaction, more sales points, less space required, more perception of CNG as normal fuel • Stationary storage cylinders (and plant) periodic revalidation (every 10 years) • Suitable location: • Urban areas • Important roads • Motorways and highways • Vehicle fleet depots (private refuelling stations)

13. Options available

14. Options • Public CNG refuelling station  scale effect • Private CNG refuelling station  more margin • Public mother-daughter station  capillary network • Mobile CNG refuelling station  capillary and flexible • Public L-CNG refuelling station  capillary and less energy intensive • Public LNG refuelling station  the better solution for long haul HD vehicles • VRA  pioneering solution; and micro fleets

15. Traditional CNG refuelling stations Mechanical - reciprocating compressors – driven by electric engine (can also be driven by nat. gas ICE) Hydraulic compressors - driven by electric HP oil pump

16. Alternative NGV refuelling system: mother/daughter station In Italy and in other countries, due to the cost of laying down a natural gas pipeline, a long distance connection of the CNG refuelling station to the natural gas pipeline becomes unaffordable above 1-2 kilometres. Up to a certain range, the refuelling stations which are too far from the existing pipeline, may be served by means of cylinder truck, filled at a normal refuelling station (mother station). About 130 cylinder trucks are in service in Italy, owned by 17 different operators of various dimension. They are serving daughter stations, and operate also for industrial and residential application natural gas supply in case of emergency, such as pipeline service break-down. This solution is suitable also to other countries needs. Source of picture: Centrale Metano Foligno - Italy

17. Innovative NGV refuelling systems: L-CNG Italy: The first L-CNG public refuelling station started operating on 30th August 2010 in Villafalletto (Cuneo, North Italy) (manufacturer: VANZETTI, Cuneo). It’s an all-made-in-Italy technology L-CNG: liquefied natural gas at -160°C, pumped in liquid form at 200 bar, with cryogenic pumps, then vaporized by means of atmospheric heat exchanger to get gaseous CNG at 200 bar, without using a compressor, which saves >90% of compression energy Cryogenic pump

18. Innovative NGV refuelling systems: L-CNG and LNG L-CNG refuellingh station in Lleida, Spain – manufacturer: INDOX CryoEnergy (ROS ROCA Group)

19. Involvement of eni in the NGV sector

20. What do eni to develop NGV market • Dedicated NGV department • Creation of a CNG trade mark • Communication, information dissemination • Collaboration with Government and Authorities • Collaboration with other energy companies • Collaboration with National, European, international associations

21. eni’s involvement in the Italian and international NGV development strategies • eni has got a dedicated department (Metauto) for the technical and commercial developoment of the NGV sector; it is practically the one and only oil and gas company to do so in Italy. • eni holds a steady contact activity with public administrations to inform them on the advantages of NGV, and to stimulate and support their fuel strategies. • Over the time, eni has signed agreements with car OEM (e.g. Fiat) and with the public administrations and authorities (e.g. Ministry of Environment) to launch wide range initiatives for the development of the NGV sector, in view of the environmental benefits it brings about. • eni participates to the activity of the associations promoting natural gas as clean fuel, and CNG as clean automotive fuel, at the national level (NGV System Italia), at the European level (NGV Association Europe) and international level (NGV GLOBAL, ex IANGV). • eni sits at the many normativetables active nationally, (e.g. with the ministry of internal affairs), on the European context (es. at CEN), and internationally (e.g. within ISO), for preparation of a modern, rational and harmonised normative framework, to foster the development of the NGV technology in all countries around the world. • eni is member of NGV Association Europe, that plays an active role in assisting the European Union authorities, on the main themes relevant to clean fuel strategies.

22. eni Divisione G&P - Metauto: an office dedicated to NGV technical and commercial development COMMUNICATION INITIATIVES NORM PRESIDIUM SVILUPPO COMMERCIALE COMMERCIAL DEVELOPMENT TECHNICAL ASSISTANCE

23. eni Divisione G & P: NGV support activity COMMERCIAL DEVELOPMENT TECHNICAL ASSISTANCE SVILUPPO COMMERCIALE COMMUNICATION INITIATIVES PARTICIPATION TO NORMATIVE ACTIVITIES • Identification of the opportunities for development and planning of distribution network • Market Analisys • Evaluation/examination of terrotorial potential penetration • Assistance in investment economical evaluation • Offer of technical assistance services to actual and/or prospect customers • Specialist support to sales personnel • Monitoring of the technology of CNG applications as automotive fuel • Support of new station construction procedure • Trade mark exploitation and protection • Initiatives and events • Support to Public Administration/ Authorities • Collaboration with Authorities, normative bodies and organisms; • Relationship with Associations at national and international level;

24. Creation and dissemination of the trade mark of eni Divisione G & P Exploitation and protection of trade mark, which can be used only by eni’s customers (previous signing of licence of use) The road signage: Road pole, Trade mark panel, CNG price display The mark

25. eni Divisione G & P: Communication Messages conveyed by eni: • Incentives for the use of CNG as automotive fuel also by means of boasting the benefits brought about by this choice of fuel (environmantal benefits, strategy, economy, safety etc.) • Promotion of a cultural change • changing the image of the CNG used as automotive fuel, from that as “cheap fuel” to that as “high quality fuel”; • progressive awareness of the NGV driver on the high added value of his choice, in terms of care for environment and society in general.

26. eni G&P Communication initiatives Collaboration with the radio broadcasting Caterpillar-RadioRai and sponsoring “Giro d’italia a metano” (road tour across Italy driving always on CNG) Contest, by buying more than 5 euro CNG, a cupon was given to customers, for contest participation. Prizes: 3 CNG cars and a number of electronic navigators. Participation to Motorshow in Bologna and similar events Some events: EnergyMed Napoli, Ecomondo Rimini, Fiera del Levante Bari,NGV 2011 Berlin

27. eni - Gazprom During a meeting taking place on 1° July 2009, Gazprom proposed to eni a Protocol for the accomplishment of the “Blue corridors” project. This project is actually the prosecution of the similar initiative, still launched by Gazprom back in late 90ties, which has the target of the construction of a European CNG refuelling station, to allow people and goods travelling on CNG all across Europe, through the so-called “Blue corridors”.

28. CNG Refuelling stations predictable trend in the short term in Italy Prediction at end 2011: ~900 refuelling stations (including 40 private)

29. CNG Refuelling stations predictable trend in the short term in Italy further growth 5 • The number of ref stations is expected to grow, due to • More penetration of CNG cars on the total national car fleet (~7% of all new cars in 2009) • government and regions encouragement to develop an adequate network • Possible increase of the penetration of private fleet sector • The improvement of the norms could further the expansion. In particular • Reduction of safety distances • Ease of the espropriation process for gas pipeline connection • Ease of the integration with the traditional station (delivery mode: self-service, multidispenser) • Predictable trend of CNG refuelling station network (estimation) • +36% • ~1.000 (*) • ~900(*) • ~750 (*) • 2013 • 2009 • 2011 • (*) includes private CNG refuelling stations for fleets (about 40)

30. Thank you