Gazprom Settles for Niche Israeli NGV Role

Gazprom said it and Israel's Delek Drilling signed a memorandum of understanding (MoU) October 2 relating to natural gas-fueled vehicles (NGVs), including road, rail and marine transport.

The niche agreement, expanding from a similarly small related one signed between the two in June 2017, is a far cry from the pivotal role in offshore gas exploration, production, or gas supply/trading once apparently coveted by the Russian gas giant.

In June 2016, Israel's prime minister Benjamin Netanyahu whilst in Moscow extended an invitation through President Vladimir Putin to Russian investors to enter Israel's upstream. But since then, as on previous occasions over the past five years, most actual foreign E&P investment offshore Israel has been by firms such as US Noble Energy, Greek firm Energean, with continuing interest in acreage from European majors.

Russia has expertise in NGVs with some 145,000 on its roads. In contrast, Israel's first NG truck was imported in 2015 and it still has very few.

"Using gas as a vehicle fuel proves that transport without pollution is possible,” said Gazprom deputy CEO Alexander Medvedev, while Delek Drilling CEO Yossi Abu also said: "Natural gas based transportation is more efficient, cheaper and reduces pollution”.

Gazprom set up Gazprom Gazomotornoye Toplivo, a special-purpose company in 2012, in order to develop the NGV market, while the Israeli government's Fuel Choices Initiative (IFCI) has worked since 2016 with Fiat Chrysler and its Dutch-registered UK partner CNH Industrial on NGVs.  

Azerbaijan desk