Page 4 - FSUOGM Week 25 2021

FSUOGM COMMENTARY FSUOGM

Massive methane release

shines spotlight on Gazprom

ahead of EU legislation

This is unwelcome publicity for Gazprom, at a time when pressure on gas
companies over their methane emissions is rising

RUSSIA GAZPROM has admitted to causing a massive said that “given the urgency” of the situation, it
methane plume detected earlier this month in was unable to use a mobile compressor station to
WHAT: Russia, attributing it to emergency repairs that reduce the methane released during the repairs.
Gazprom has caused forced the company to close down the Uren- Kayrros detected another methane plume in
several major methane goy-Center 1 pipeline. late May that Gazprom attributed to two days of
plumes recently. Methane is a many times more potent green- planned maintenance on the Urengoy-Petrovsk
house gas (GHG) than carbon dioxide, although pipeline in the Bashkortostan region. And the
WHY: it is released into the atmosphere in far smaller company has admitted to being responsible for
The incidents not only quantities. The accident in Russia comes as EU three other releases in Russia this month.
undermine the company's authorities debate legislation that would force The June plume was still only 0.1% of the
climate credentials, but gas companies to do more to identify and reduce company’s total pollution in 2019, analysts at
could sway EU decision- their methane emissions. The legislation is Moscow-based VTB Capital (VTBC) said in
makers to take a firmer expected to apply to importers of gas into Europe a research note. But still, “the situation might
stance against Russia on such as Gazprom. be quite negative for sentiment on Gazprom’s
methane emissions. The enormous leak was first identified with shares.”
satellite data by geoanalytics firm Kayrros SAS. The incidents could also undermine Gaz-
WHAT NEXT: Gazprom said on June 4 that pipeline repairs led prom’s image among increasingly climate-con-
Brussels plans to to around 2.7mn cubic metres of methane escap- scious investors. Methane emissions are a key
introduce regulation ing into the atmosphere. Kayrros estimated an metric in the environmental social and gov-
next year that will force emissions rate of 395 metric tonnes per hour, ernance (ESG) scores given to oil and gas com-
oil and gas companies which would make Gazprom responsible for the panies, and these scores are carefully noted by
to reduce their methane worse methane release in the oil and gas industry increasingly climate-conscious investors.
emissions. since September 2019. This is also unwelcome publicity for Gaz-
Gazprom said the release had occurred after prom at a time when the company and other
it had identified a problem at Urengoy-Center 1 European gas suppliers face intense scrutiny over
pipeline in the Tatarstan region. The company their methane footprint. It comes as European

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