Page 4 - GLNG Week 45 2021

GLNG COMMENTARY GLNG

Chevron to use carbon credits to

make up for Gorgon CCS shortfall

Chevron and its partners in the giant Gorgon LNG project in Australia will buy carbon

credits likely worth more than $183mn to compensate for failing to meet carbon

capture targets

ENERGY SUPER-MAJOR Chevron and its partners in Offset package
TRANSITION the giant Gorgon LNG project on Barrow Island, Now Chevron has agreed to implement an offset
Western Australia, have agreed to buy 5.23mn package to make up for the CCS shortfall. The
WHAT: greenhouse gas (GHG) offsets as a penalty for super-major announced this week that it would
The partners in Gorgon failing to meet carbon capture and storage (CCS) fulfil its regulatory obligations via the acquisition
LNG have agreed to buy targets. and surrender of the carbon offsets. It is aiming
carbon credits. In the five-year period up to July 2021, only to wrap up the process by July 2022.
5mn tonnes of carbon dioxide equivalent Based on the price of carbon offsets on the
WHY: (CO2e) were captured using the CCS facility voluntary Australian spot market, which hit a
The carbon capture and at Gorgon, out of around 15.3mn tonnes that record high of AUD37 ($27) per tonne last week,
storage project at Gorgon flowed to Barrow Island from offshore gas fields. 5.23mn offsets would cost at least AUD195mn
has failed to meet targets Chevron and its partners are estimated to have ($142mn). However, Reuters has estimated
set by the government of missed the goal of capturing a minimum of 80% that the cost could end up being even higher,
Western Australia. of the emissions from Gorgon by 7.4mn tonnes. amounting to well over AUD250mn ($183mn).
The target was a condition of the environmental On top of future price fluctuations, Chevron will
WHAT NEXT: approval for Gorgon, set by the government of also have to contend with a shortage of Austral-
Australian Carbon Credit Western Australia. ian Carbon Credit Units (ACCUs). The com-
Units are in short supply Failure to meet the target occurred in part pany is unlikely to be able to meet its obligation
and other offsets will because of delays in starting up the CCS facil- with those units alone, and told the state govern-
likely be needed. ity, which only began CO2 injection in August ment that it would also use other internationally
2019, three years behind schedule, as a result of verified carbon units and offsets.
technical issues. The facility also does not yet Additionally, Chevron has announced an
appear to have reached full capacity, as it was AUD40mn ($29mn) investment into “lower
designed to capture up to 4mn tonnes per year carbon” projects in Western Australia as part
(tpy) of CO2. of the offset package. No further details were

P4 www. NEWSBASE .com Week 45 12•November•2021