Under the deal announced Monday in Hannover, Germany, by Gazprom Chairman Viktor Zubkov, the Russian company's subsidiary Gazprom Germania GmbH will become the sole supplier of compressed natural gas vehicle fuel for Volkswagen's Scirocco R-Cup racing series, starting next month.
Volkswagen has staged the CNG-fueled nine-race series since 2010, a year after a VW Scirocco using natural gas turned in an impressive showing at the Nurburg, Germany, 24-hour endurance race, where it finished 17th overall and at the top of several classes.
That result served as major boost for CNG-fueled cars, which are widely praised removing greenhouse gases from the atmosphere but which are more expensive to buy and difficult to refuel because filling station selling natural gas are few and far between in Germany.
Building on their environmentally-friendly image, Volkswagen has promoted NGVs with the Scirocco R-Cup, which it bills as the "world's cleanest car race" series, where a mix of 25 established and new drivers compete for the championship.
This season's grand finale is set for Oct. 13 at Hockenheim, Germany.
"NGV fuel has a high potential of utilization that will allow using motor vehicles in an environmentally friendly and cost efficient way," Zubkov said. "Gazprom views this line of business covering, inter alia, foreign markets as a priority growth area.
"In this context, the agreement with Volkswagen is a natural follow-up to our mission on expanding the use of NGV fuel in Europe. I am confident that our cooperation will be a success."
"We warmly welcome Gazprom as a new partner of Scirocco R-Cup," Volkswagen Board Member Ulrich Hackenberg added. "Volkswagen has always prioritized environmentally clean and energy-efficient motorsport," noting his company has "succeeded in making gas-powered cars."
Zubkov said he considers the NGV market a "promising area" in Gazprom's efforts to sell Russian gas abroad, primarily in Europe.
Gazprom is sinking resources into developing a refueling infrastructure in Europe.
Last year, Gazprom Germania opened four new CNG filling stations, bringing its total to six, and says by 2015 it aims to increase that number to 15.
Another Gazprom subsidiary, Vemex, owns six CNG filling stations in the Czech Republic and likewise expects to bring that number up to 15 by with two years.
Domestically in Russia, Gazprom says there are 86,000 NGV vehicles, with a CNG demand of about 345 million cubic meters in 2010. Some 255 CNG filling stations are operating in 60 regions of the Russia, 206 of which are owned by Gazprom.
In 2007 the company began a seven-year CNG filling network and NGV fleet development effort aimed at boosting Russia's gas-filling capacities to 2.6 billion cubic meters annually.
It would also raise the number of CNG-powered cars, trucks and tractors by more than 50,000 units in the country.
Germany, meanwhile, is the biggest European vehicle market with some 60 million in total, but so far boasts only 95,000 NGVs, the Natural and BioGas Vehicle Association says.
The group, predicted, however, the growth of NGVs will "become more dynamic due to the increasingly strong industry commitment on the refueling and vehicle side."