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which it has set a deadline of 2050. Tokyo Gas Other steps towards tracking – and ultimately
has voiced hopes that more LNG producers reducing – the emissions associated with LNG
will offer a carbon-neutral version of their fuel, cargoes have already been reported on by GLNG
so that the company can work on widening its in recent weeks. These include the deal struck in There is some
sources of supply. February by Singapore’s Pavilion Energy with
Chevron in February, under which around way to go
Other moves 500,000 tonnes per year (tpy) of LNG will be sup- until the new
The news about the Japanese consortium comes plied to Singapore from 2023. Each LNG cargo
around the same time that a number of other delivered under this agreement will be accompa- generation of
moves have been made, either involving car- nied by a statement of its GHG emissions, meas-
bon-neutral LNG or a shift towards the con- ured from wellhead to discharge port. proposed low-
cept. Also last week, Russia’s Gazprom reported Pavilion already has a similar agreement
that it had delivered the first carbon-neutral in place with Qatar Petroleum (QP), having emissions LNG
LNG cargo to reach Europe, in collaboration launched a tender last year seeking partners that plants will be
with Royal Dutch Shell. The super-major took would help it to develop an industry standard for
delivery of the cargo, which was sourced from measuring LNG emissions. It was also seeking to built – assuming
Novatek’s Yamal LNG project in Russia, at the mitigate its own emissions, and ultimately make
Dragon LNG terminal in Wales. its own purchases carbon-neutral. they proceed to
According to Shell, an average LNG cargo Also in February, leading US LNG producer
of about 70,000 tonnes emits roughly 240,000 Cheniere Energy announced that it would start construction.
tonnes of carbon dioxide equivalent (CO2e) supplying information on the emissions asso-
across the value chain. ciated with its cargoes to customers. Cheniere’s
Shell has been involved in the shipping of a president and CEO, Jack Fusco, noted at last week’s
handful of carbon-neutral LNG cargoes to date, CERAWeek by IHS Markit conference that the
including the one received by Tokyo Gas in 2019 company had reduced its emissions intensity by
– one of the first two such cargoes in the world de-bottlenecking its plants, adding that it expected
at that time. to continue leading on climate issues.
Separately, commodity trader Vitol
announced on March 1 that it was launching a What next
green LNG product that will allow customers There is some way to go until the new generation
to offset the greenhouse gas (GHG) emissions of proposed low-emissions LNG plants will be
associated with their cargoes. Vitol said in a built – assuming they proceed to construction.
statement that all of its LNG customers would However, the developments seen in recent weeks
be offered the opportunity to convert cargoes to illustrate that both buyers and sellers of LNG are
green LNG through carbon offsets, with emis- beginning to take steps towards carbon-neutral
sions to be offset estimated using the Wood Mac- cargoes.
kenzie LNG Emissions Tool. The offsets will be Little has been said about cost by those begin-
sourced from Vitol’s existing portfolio and from ning to trade carbon-neutral LNG, because the
the wider market. price of individual cargoes is generally confiden-
Vitol’s head of LNG, Pablo Galante Escobar, tial, but it will be higher than that of standard
commented that “the bar for transitional energy cargoes. This presents a challenge for those seek-
solutions is rightly being raised”. ing to be competitive by lowering costs. While
“We anticipate demand for carbon-mitigat- the cost of carbon-neutral LNG will come down
ing energy solutions to grow as the world focuses over time, this is set to be one of the major chal-
on achieving net zero,” added Vitol’s head of lenges involved in the shift towards low-carbon
emissions trading, Michael Curran. and carbon-neutral variants of the fuel.™

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