Page 5 - GLNG Week 27 2021

GLNG COMMENTARY GLNG

The delivery comes amid a wider push by Jap- The developer has teamed up with Mitsubishi
anese energy companies to reduce their carbon Gas Chemical (MGC) to study the use of CO2
footprints, following Japanese Prime Minister at both MGC’s petrochemical plant in Nii-
Yoshihide Suga’s pledge in October 2020 that the gata Prefecture as well as the two companies’
country would cut its carbon emissions to net Higashi-Niigata gas field.
zero by 2050. JAPEX has also teamed up with Indonesia’s
state-owned Pertamina as well as the Research
Green goals and the Development Centre of Oil and Gas
Inpex said on July 1 that it had signed a car- Technology of Indonesia (LEMIGAS) to study
bon-neutral gas sales and purchase agreement the use of CCUS technology at the onshore
with the Joetsu City Gas and Water Bureau in Sukowati oilfield in East Java Province.
Niigata Prefecture.
The agreement will see the bureau buy car- What next
bon-neutral gas from Inpex from this month Commenting on its recent deal with Osaka Gas,
until March 2026, allowing it to convert some Shell said the transition to a low-carbon energy
of the gas it supplies to Arisawa Manufactur- future would require a “range of solutions across
ing to carbon-neutral gas. Inpex said the deal the global energy system”, noting that LNG rep-
would help to cut CO2 emissions by around resented a readily available source of gas that
19,000 tonnes. produces half the greenhouse gas (GHG) emis-
Inpex said the gas supplies would be made sions and less than 10% of the air pollutants than
carbon neutral thanks to carbon credits certified coal when used to generate electricity.
by a credible certifier as deriving from projects Shell described its use of carbon credits as one
such as forest conservation that reduce CO2 of the “levers” that need to be pulled to decar-
emissions. bonise LNG. The company said: “Lower-emis-
Tokyo Gas announced in March that it had sion LNG production, methane management
teamed up with 14 other Japanese companies and using carbon capture and storage (CCS)
across different sectors to form the Carbon Neu- technologies are all different ways to lower emis-
tral LNG Buyers Alliance. sions along the value chain. While these technol-
Tokyo Gas has agreed to procure and sup- ogies develop at scale, an immediate action today
ply CNL to the others, noting at the time that it is to use the best quality nature-based offsets to
wanted to promote both the use of the cleaner compensate for emissions along the LNG value
fuel to tackle climate change as well as environ- chain.”
mental, social and corporate governance (ESG). With Asia’s governments increasingly focused
Tokyo Gas’ statement publicly coined the term on the carbon neutrality goals, gas exporters
CNL for the first time. have begun preparing for a time when CNL will
Japanese companies are also studying how be mandatory. Carbon credits are an easy way
to adapt carbon capture, utilisation and storage of securing CNL today, but the longevity of this
(CCUS) technology to both reduce upstream strategy is already under the microscope.
emissions and boost production levels. Critics of carbon credits argue that they rep-
resent a flawed model that can be easily misused
Inpex has teamed up with state-affiliated or even manipulated. There is mounting concern
Japan Oil, Gas and Metals National Corp. (JOG- over a growing market of outdated credits that
MEC) to implement a CO2 enhanced oil recov- offer no carbon benefit, owing to the fact that
ery (EOR) pilot test at the Minami-aga oilfield the projects they were supposed to fund are now
in Niigata Prefecture. The two companies hope operating without the benefit of credit sales.
to demonstrate the effectiveness of CO2 foam- Mark Maslin of University College London,
based EOR technology that is still under devel- co-author of a new analysis written with Trove
opment and intend to begin drilling two new Research, dubbed these as “poor-quality credits”.
wells in 2022 to carry out the pilot test. LNG importers and exporters can rely on car-
Japan Petroleum Exploration (JAPEX), bon credits for now, but would be wise to ramp
meanwhile, is also investigating the use of CCUS up their investment in the other options Shell has
technology at its domestic upstream operations. highlighted, including CCUS.™

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