Page 6 - NorthAmOil Week 24 2021
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NorthAmOil                                    COMMENTARY                                          NorthAmOil




       Clean LNG initiatives accelerate







       New initiatives related to clean LNG and decarbonisation appear to be accelerating,

       with more developments announced in recent days



        GLOBAL           EFFORTS to decarbonise LNG continue apace,  company Temasek Holdings, put out a call last
                         and appear to be picking up momentum with  year for sellers of LNG to quantify their GHG
       WHAT:             a handful of new developments announced in  emissions and to partner with it on developing
       More initiatives related   recent days.                an industry standard for reporting and moni-
       to the decarbonisation   Some of the initiatives mark a continuation  toring such emissions. The three subsequent
       of LNG have been   of previously announced plans, while others are  supply deals illustrate that at least some LNG
       announced in recent   altogether new developments. And both types  players are responding to the call.
       days.             illustrate that decarbonisation is increasingly   Ultimately, Pavilion also wants producers of
                         becoming a priority for the LNG industry as it  LNG to offset their emissions. The company
       WHY:              seeks to demonstrate that it can have a role to  imported Singapore’s first carbon-neutral LNG
       LNG industry players   play in the energy transition.  cargo in April.
       are increasingly trying
       to demonstrate that they   Third supply deal           Cheniere’s progress
       can have a role to play in   Among the most recent developments is a new  Pavilion is not the only company to be making
       the energy transition.  supply deal between Singapore’s Pavilion Energy  progress with its plans to quantify – and ulti-
                         and BP with a greenhouse gas (GHG) emissions  mately reduce – GHG emissions from LNG. The
       WHAT NEXT:        quantification component.            US’ Cheniere Energy announced this week that
       Yet more moves to clean   Pavilion Energy Trading & Supply announced  it had agreed to collaborate with five gas produc-
       up LNG are expected   that it had signed the long-term sale and pur-  ers and several “leading” academic institutions
       to follow, but the costs   chase agreement (SPA) with BP Singapore for  on implementing quantification, monitoring,
       involved will be a   the supply of roughly 800,000 tonnes per year  reporting and verification (QMRV) of GHG
       concern.          (tpy) of LNG to Singapore for 10 years from  emissions performance at gas production sites.
                         2024. The two companies said they would “strive   This comes as Cheniere – the US’ largest
                         to co-develop and implement a greenhouse gas  producer of LNG – works towards providing
                         (GHG) quantification and reporting method-  its customers with GHG emissions data asso-
                         ology”. The methodology will cover emissions  ciated with each of its cargoes, from wellhead
                         from the wellhead to the discharge terminal,  to cargo delivery point, from 2022. This initia-
                         they added.                          tive comes with a particular set of challenges, as
                           This is the third long-term deal to be signed  Cheniere sources its feed gas from a wide variety
                         by Pavilion since November, as Singapore seeks  of regions and producers.
                         to diversify its gas imports ahead of the expiry of   In this, the US’ LNG industry differs from that
                         pipeline gas contracts with neighbouring Indo-  of certain other countries, where a single com-
                         nesia from 2023. The other two deals – with  pany or consortium may develop a field solely
                         Qatar Petroleum (QP) and Chevron – both  to support an LNG project that it also operates.
                         require each delivered cargo to be accompanied  Now Cheniere is taking steps to overcome the
                         by a statement of its GHG emissions.  challenge involved in quantifying emissions
                           The deals were struck after Pavilion, which  from the multiple parties involved in its supply
                         is owned by Singapore state-owned investment  chain.























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