Page 5 - GLNG Week 36 2021

GLNG COMMENTARY GLNG

Carbon credits are
typically purchased
from nature-based
projects to offset
emissions related to an
LNG cargo in order to
make it carbon-neutral.

Shikoku Electric in mid-August. And Japan’s offsets is the only way to decarbonise LNG.
Inpex announced last week that it was deliver- Other players are increasingly touting carbon
ing a carbon-neutral LNG cargo to domestic gas capture and storage (CCS) as a means of ensur-
distributor Shizuoka Gas. ing emissions from the production of LNG are
New deliveries to other destinations are also contained at the liquefaction site.
becoming more plentiful. This week, BP said it In late August, Indonesian regulator SKKMi-
had delivered a carbon-offset cargo to Taiwan’s gas approved BP’s plans for a CCS project at the
CPC, in its first such delivery to the Asia-Pacific Tangguh LNG site to help support an expansion
region. However, Bloomberg noted that while of the facility’s LNG production. (See GLNG
the credits involved covered carbon dioxide Week 35) In the US, meanwhile, Venture Global
(CO2) and methane emissions generated dur- LNG recently unveiled plans to develop CCS
ing the production and up to the point of trans- capacity to serve its Calcasieu Pass liquefaction
ferring the LNG to the receiving terminal, they terminal and its proposed Plaquemines LNG
did not cover the emissions from the combus- plant. Calcasieu Pass is under construction and
tion of gas. This part of the process produces approaching completion, while initial work at
roughly 70% of the total carbon footprint, the the Plaquemines site began in August before
news service noted. being disrupted by Hurricane Ida.
This example illustrates one of the challenges While it will take time for the CCS capacity to
involved in the trade of carbon-neutral LNG be built, the plan puts Venture Global on course
– there is no industry-wide standard to meas- to become the first US LNG producer to deploy
ure emissions from the production and trade CCS. Cheniere Energy and Sempra Energy have
of the super-chilled fuel. This becomes clearer also suggested that they would consider options
still when examining other carbon-neutral or for developing CCS at their US LNG plants,
carbon-offset cargoes more closely. For exam- which are already operational, but no concrete There is no
ple, in the case of Petronas’ delivery to Shikoku, plans for this have emerged yet.
the offsets involved covered emissions from CCS would also be a component of plants industry-wide
production to shipment, but did not cover the that are being proposed for the US Gulf Coast standard
cargo’s consumption in Japan, according to a by NextDecade and G2 Net Zero LNG. These
spokesperson from Shikoku that was cited by plants are not guaranteed to be built – indeed, to measure
Bloomberg. NextDecade’s Rio Grande LNG recently suf-
Efforts to develop standardised methodol- fered a blow when a court ordered a review of emissions from
ogies are underway, often involving traders of the project’s environmental impact. Nonethe-
LNG, but any methodologies that emerge will less, CCS increasingly appears to have a role to the production
have to compete with rival ones for uptake play at new LNG terminals – and potentially and trade of the
across the industry. The point at which numer- existing ones too.
ous LNG players subscribe to a single method- However, the only existing LNG project to super-chilled
ology could therefore still be some time away. have a CCS component to date, Chevron’s Gor-
In the meantime, companies will likely continue gon LNG in Australia, has suffered numerous fuel.
to decarbonise in a piecemeal manner, where technical setbacks and has fallen far short of
the use of offsets is widespread but the types of its initial CO2 capture targets to date. Other
players that provide carbon credits vary and the developers of CCS capacity for LNG terminals
approach attracts further criticism. will have to demonstrate that they can deploy
carbon capture more effectively in order for the
Carbon capture technology to be seen as a viable decarbonisa-
This is not to say, however, that using carbon tion option for the LNG industry.™

Week 36 10•September•2021 www. NEWSBASE .com P5