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Project description : constructing the gas-filling compressor station for vehicles (GFCSV), ‘Mostransmetan' open joint-stock company (OAO ‘Mostransmetan')

Location: Lot 8, Levoberezhnaya street, Northern Administrative District, Moscow, Russia

Land lot: a land lot with the area of 0.85 hectares will be allotted to OAO ‘Mostransmetan' for the construction of GFCSV. The lot borders the territory of the ‘11 th Bus Garage of the ‘Mosgortrans' State Unitary Enterprise'. OAO ‘Mostransmetan' is exempt from the payment for making the agreement to lease the land lot. After the construction completion an agreement for a 49-year-long lease will be made.

Legal and regulatory base: the Decree of the Moscow city administration No. 166-RP dated 5 February 2003 ‘On Some Measures for Implementing the Special City Programme for the Use of Alternative Types of Fuel for the City Automobile Transport in 2002 to 2004 in What Regards the Extended Use of the Compressed Natural Gas (CNG) as a Motor Fuel” issued for the implementation of the Decree of the Moscow city administration No. 170-PP dated 12 March 2003 ‘On the City Special Programme for the Use of Alternative Types of Fuel for the City Automobile Transport in 2002 to 2004'.

Project development: Moscow City Department of Transport and Communications, ‘Mosgortrans' state unitary enterprise, ‘SG-Trans' federal state unitary enterprise and OAO ‘Mostransmetan'.

The general contractor for the project design is the ‘MosgortransNIIproekt' state unitary enterprise under the ‘Mosgortrans' state unitary enterprise.

The project is in the pre-project design state and from 15 December 2003 the development of the detailed design began.

Project description: The Moscow city administration considers the use of the CNG as a motor fuel for the city's land transport one of the most important ways for improving the environmental conditions in the city. Because of that it decreed to establish ‘Mostransmetan', an open joint-stock company with the city of Moscow's share (25 percent of shares + 1 share). The project comprises an interrelated set of sub-projects which include:

•  renovation of the production and engineering facilities of the 11 th bus garage;

•  transferring 300 city buses to the CNG use in 2003 to 2005;

•  construction of a stationary GFCSV with the filling capacity no less than 250 fillings a day.

This is a ‘pilot' stage of the ‘City Medium-term Programme for the Transfer of the ‘Mosgortrans' State Unitary Enterprise to the Use of the Compressed Natural Gas as the Motor Fuel' which is currently being developed. The project stipulates transferring two more bus garages operated by the ‘Mosgortrans' state unitary enterprise to the use of the CNG.

This project is first of such kind in Russia by both its technical aspects (engines operating on the compressed gas alone are used) and the number of buses included in the project (in total up to 1,000 vehicles before 2008).

Possible co-operation forms: any version may be suggested: direct participation in the project; providing investments for the construction of the GFCSV and for the purchase of gas-operated buses and spare parts to them; obtaining credits; providing buses and equipment for leasing, etc.

In general, any form of financing the project not involving budget resources may be considered.

Main technical and economic characteristics:

The investment amount equals 80m roubles.

In accordance with the Decree of the Moscow city administration No. 166-RP dated 5 February 2003 a budget credit may be provided for a five-year period.

A possibility for OAO ‘Mostransmetan' to obtain a commercial credit with the interest rate subsidised from the Moscow city budget is currently under consideration.

The estimated annual amount of the sold gas is 10.5m cub. m.

The project economy is in general based on the Decree of the Russian Federation Government No. 31 date 15 January 1993 ‘On Urgent Measures for the Extended Use of the Natural Gas Instead of Motor Fuels' according to which (see point 1) “During the period when regulated prices on the gas sold to private consumers are in effect, the maximum retail price on the compressed natural gas provided by gas-filling compressor stations for vehicles should be set in the amount of no more than 50 percent of the price for the grade A-76 gasoline sold in the region, with VAT included.”

The table below contains indexes of the project investment attractiveness (efficiency).

INDEX VALUE
Discount rate, % 14
Pay-back period (PB), month 54
Discounted present value (DPV), month 73
Net reduced value (NRV), million roubles 12.25
Profitability index (PI) 1.16
Internal rate of return (IRR), % 18.79
Calculation period for integral indexes, month 84

The table below contains indexes of the project budget efficiency.

INDEX VALUE
Comparison rate, % 14
Pay-back period for budget investments (PB), month 46
Net reduced value for the city budget (NRV), million roubles 22,36
Profitability of the investments made from the Moscow city budget 1,28
Internal rate of return (IRR), % 22.96

The quoted values have been calculated using the retail price of gas equal to 3.50 rouble/cubic meter and the inflation rate equal to 12 percent.

Currently the economic indicators are re-calculated using the actual prices on the gasoline and diesel fuel in Moscow in Q3 2003 and the retail price for gas equal to 4.15 rouble/cubic meter thus reducing the project pay-off period.

Total cost of the project: 80.0 (eighty) million roubles.

Project implementation period: from 2003 to 2005. The medium-term programme currently being developed is extended to 2008.

Project implementation stage: providing financial resources for the project.                     
 

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