Page 10 - AsianOil Week 12 2022

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NextDecade, Guangdong Energy

sign HoA for LNG supply

PROJECTS & US-BASED NextDecade announced on March The French position appears to have since
COMPANIES 24 that it had signed a binding heads of agree- changed, as Engie agreed last year to buy LNG
ment (HoA) with China’s Guangdong Energy for from another US producer, Cheniere Energy,
the supply of LNG from a planned facility on the and expanded the scope of that deal earlier in
US Gulf Coast. March. Nonetheless, NextDecade has been left
Under the HoA, Guangdong Energy will buy trying to line up other buyers.
up to 1.5mn tonnes per year (tpy) of LNG indexed This is despite the fact that NextDecade has
to the Henry Hub gas benchmark from Next- claimed it will produce the greenest LNG in the
Decade’s proposed Rio Grande terminal in Texas world at the project, using carbon capture and
over a 20-year period. The agreement requires the storage (CCS), net-zero electricity and responsi-
companies to finalise a sales and purchase agree- bly sourced gas (RSG) to cut Rio Grande’s emis-
ment (SPA) in the second quarter of this year. sions by more than 90%.
The agreement marks a step forward for Rio Indeed, Guangdong Energy acknowledged
Grande LNG after NextDecade delayed a final the energy transition potential of procuring LNG
investment decision (FID) until the second half of from the Rio Grande project.
this year – the latest in a series of delays for the pro- “Henry Hub-linked LNG will be an impor-
ject. The company also has an SPA with Shell, cov- tant part of our LNG portfolio as we transit to a
ering 2mn tpy of LNG from Rio Grande, but had greener future and optimise our resource pro-
been struggling to lock in other buyers. France’s curement,” stated Guangdong Energy Natural
Engie pulled out of talks over a deal with Next- Gas’ chairman, Zhu Zhanfang. “We look for-
Decade in November 2020 amid reports of pres- ward to a long-lasting and fruitful co-operation
sure from the French government over concerns with NextDecade, not necessarily just in LNG
that LNG produced from shale feedstock did not supply, but potentially in carbon capture and
align with the country’s climate change goals. storage as well.”™

Occidental signs deal to sell net-

zero oil to South Korean refiner

ENERGY OCCIDENTAL Petroleum announced this help offset its own emissions, among other
TRANSITION week that it has reached a deal to sell what it companies.
described as net-zero oil to SK Trading Interna- Until now, production of emissions-free fossil
tional, a unit of South Korean refiner SK Innova- fuels has remained an elusive feat for the energy
tion. Under the terms of agreement Occidental sector. Even if oil companies slash emissions
will sell SK up to 200,000 barrels per year of oil from their own operations and suppliers, oil still
over a five-year period beginning in 2025. releases GHGs when it is burned by end-users,
Although oil releases greenhouse gases with these known as Scope 3 emissions.
(GHGs) when burned, Occidental calls the DAC has been touted as one method of reduc-
Emissions from the oil product net-zero oil because the company says ing, or potentially eliminating, the emissions that
will be offset using the it will be able to remove carbon dioxide (CO2) come from crude. Analysts at Citigroup told
direct air capture plant from the atmosphere using a planned direct Bloomberg that this is the “most exciting part” of
Occidental is building in air capture (DAC) facility. The amount of CO2 Occidental’s business and believe it could com-
the US’ Permian Basin. removed through the DAC facility will be prise a significant portion of the company’s stock
enough to offset all emissions associated with valuation over the next decade.
that crude’s lifecycle from extraction to con- “We are pleased to be a part of the world’s
sumption, according to the company. first carbon-emission reduction initiative that
Occidental will inject about 100,000 tonnes is underpinned by processing net-zero oil on a
per year (tpy) of captured atmospheric CO2 life-cycle analysis basis,” Suh Sok-won, president
into reservoirs in the Permian Basin that it and CEO of SK Trading, said in a statement.
already uses for enhanced oil recovery (EOR). SK Innovation has vowed to halve its carbon
The new facility is expected to open in late 2024 emissions by 2030, with a target of becoming
and has also received backing from United carbon-neutral before 2050 as part of its “Carbon
Airlines Holdings, which intends to use it to to Green” strategy.™

P10 www. NEWSBASE .com Week 12 25•March•2022