Page 9 - GLNG Annual Review 2021

GLNG MARCH GLNG

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

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