Page 9 - AsiaElec Week 37 2021

AsiaElec COMMENTARY AsiaElec

LNG shipments have changed hands so far this provide carbon credits vary and the approach
year than in 2019 and 2020 combined. North attracts further criticism.
Asian buyers in particular are increasingly
turning to carbon-neutral cargoes as they seek Carbon capture
to reduce emissions while meeting growing This is not to say, however, that using carbon off-
demand for natural gas and power generation. sets is the only way to decarbonise LNG. Other
Japan is the largest buyer of carbon-neutral players are increasingly touting carbon capture
LNG thus far. Indeed, one of the most recent and storage (CCS) as a means of ensuring emis-
carbon-neutral cargoes to be announced was sions from the production of LNG are contained
delivered by Malaysia’s Petronas to Japan’s Shi- at the liquefaction site.
koku Electric in mid-August. And Japan’s Inpex In late August, Indonesian regulator SKKMi-
announced last week that it was delivering a car- gas approved BP’s plans for a CCS project at the
bon-neutral LNG cargo to domestic gas distrib- Tangguh LNG site to help support an expansion
utor Shizuoka Gas. of the facility’s LNG production. (See GLNG
New deliveries to other destinations are also Week 35) In the US, meanwhile, Venture Global
becoming more plentiful. This week, BP said it LNG recently unveiled plans to develop CCS
had delivered a carbon-offset cargo to Taiwan’s capacity to serve its Calcasieu Pass liquefaction
CPC, in its first such delivery to the Asia-Pacific terminal and its proposed Plaquemines LNG
region. However, Bloomberg noted that while plant. Calcasieu Pass is under construction and
the credits involved covered carbon dioxide approaching completion, while initial work at
(CO2) and methane emissions generated during the Plaquemines site began in August before
the production and up to the point of transfer- being disrupted by Hurricane Ida.
ring the LNG to the receiving terminal, they did While it will take time for the CCS capacity to
not cover the emissions from the combustion of be built, the plan puts Venture Global on course
gas. This part of the process produces roughly to become the first US LNG producer to deploy
70% of the total carbon footprint, the news ser- CCS. Cheniere Energy and Sempra Energy have
vice noted. also suggested that they would consider options
This example illustrates one of the challenges for developing CCS at their US LNG plants,
involved in the trade of carbon-neutral LNG – which are already operational, but no concrete
there is no industry-wide standard to measure plans for this have emerged yet.
emissions from the production and trade of the CCS would also be a component of plants
super-chilled fuel. that are being proposed for the US Gulf Coast
This becomes clearer still when examining by NextDecade and G2 Net Zero LNG. These
other carbon-neutral or carbon-offset cargoes plants are not guaranteed to be built – indeed,
more closely. For example, in the case of Pet- NextDecade’s Rio Grande LNG recently suffered
ronas’ delivery to Shikoku, the offsets involved a blow when a court ordered a review of the pro-
covered emissions from production to shipment, ject’s environmental impact. Nonetheless, CCS
but did not cover the cargo’s consumption in increasingly appears to have a role to play at new
Japan, according to a spokesperson from Shi- LNG terminals – and potentially existing ones
koku that was cited by Bloomberg. too.
Efforts to develop standardised methodol- However, the only existing LNG project to
ogies are underway, often involving traders of have a CCS component to date, Chevron’s Gor-
LNG, but any methodologies that emerge will gon LNG in Australia, has suffered numerous
have to compete with rival ones for uptake across technical setbacks and has fallen far short of its
the industry. The point at which numerous LNG initial CO2 capture targets to date. Other devel-
players subscribe to a single methodology could opers of CCS capacity for LNG terminals will
therefore still be some time away. In the mean- have to demonstrate that they can deploy carbon
time, companies will likely continue to decar- capture more effectively in order for the technol-
bonise in a piecemeal manner, where the use of ogy to be seen as a viable decarbonisation option
offsets is widespread but the types of players that for the LNG industry.™

Week 37 15•September•2021 www. NEWSBASE .com P9