![]() ![]() ![]() ![]() This will also align with efforts already under way from suppliers as they come under greater public and investor pressure to manage their carbon footprints. That’s just for a single year’s cargoes: as LNG demand grows, so the number of cargoes, carbon offsets and trees required will also grow.įor suppliers, a more focused approach that targets reducing emissions in upstream and liquefaction may be more achievable. This is achievable for a small number of cargoes and currently the cost of these offsetting projects is relatively cheap.īut is this achievable across the entire LNG industry? 2019 saw around 5,500 LNG cargoes sold, which would require around 1.5 billion trees or carbon credit equivalent. Over an average cargo life cycle, approximately 270,000 tonnes of CO 2 equivalent is produced, requiring something like 240,000 trees to offset the emissions. The second-largest components – upstream and liquefaction – are much more dependent on project and location. If we break down life-cycle emissions of an LNG cargo, regardless of the cargo’s source or where it is finally consumed, combustion dominates the emissions footprint. How much carbon are we talking about and how is this offset? QP won the contract to supply most of this volume through its commitments to implementing CCS and reduced carbon.īut I am in no doubt that demand for cleaner LNG will only grow, with the carbon footprint of LNG cargoes set to become an important differentiator for buyers and sellers alike. In addition, Singapore’s Pavilion Energy issued a tender in March for 2 mmtpa of LNG with specific environmental criteria and requirements around the carbon footprint. So far, seven carbon-neutral cargoes have been delivered or agreed, all to buyers in Asia, with more understood to be under discussion. And while emissions can be offset in different ways, what’s more critical is the carbon that is measured and included in the first place: deals that have been agreed to date have not applied a consistent approach and have not considered emissions or offset these emissions in the same way. Measuring emissions is a major challenge, with no consistent definition, methodology or reporting structure in place. Instead, the carbon emissions associated with the upstream production, liquefaction, transportation and, if required, combustion of the gas is measured, certified and offset through the purchase and use of carbon credits, which support reforestation, afforestation or other renewable projects. To begin with, ‘carbon neutral’ does not mean the LNG cargo creates zero emissions. It’s a good question as there remains a fair amount of misunderstanding about just what is meant by carbon neutral – or green – LNG. We have also now seen the delivery of the world’s first carbon-neutral cargoes into several Asian markets.īut what exactly is carbon-neutral LNG? Why are buyers in Asia showing an appetite for green cargoes? And how are suppliers responding? To understand more, I spoke to Lucy Cullen, Principal Analyst in our Asia Pacific Gas & LNG team. This is leading LNG buyers in Asia to place the carbon footprint of LNG under greater scrutiny, with growing calls for carbon emissions to be detailed in tenders. Significant emissions are released through the combustion of gas to drive the liquefaction process and any CO 2 removed prior to entering the plant is often vented into the atmosphere. LNG ranks among the most emission-intensive resource themes across the oil and gas sector. ![]()
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