Page 6 - FSUOGM Week 36 2021

FSUOGM COMMENTARY FSUOGM

over the years to provide a hedge against measurement, reporting and verification at a
oil market volatility, but it has had difficult company level for all energy-related methane
advancing new projects as gas prices in Rus- emissions.” Companies will also be required to
sia offer a low return. Those projects would improve leak detection and repair at their infra-
suddenly become far more feasible if Rosneft structure, and eliminate routine venting of meth-
gained European customers. Rosneft produced ane and flaring.
under 63 bcm of gas last year, but it has esti- Under discussion is whether to apply these
mated it could ramp up supply to 100 bcm per rules to a third-party gas supplier such as Russia,
year in the future. and the recent incidents at Gazprom’s pipelines
Russian Deputy Prime Minister Alexander could sway European decision-makers in favour
told Interfax on September 2 that the govern- of doing so, convincing them that the Russian
ment had received a request from Rosneft for supplier cannot be trusted to deal with its emis-
access to Nord Stream 2 and would decide on the sions itself.
matter at a later date. There is a lot of resistance
to the liberalisation of gas exports in the govern- Hydrogen ambitions
ment, with officials fearing that this would result Hydrogen has been pitched as a critical way that
in Russian suppliers competing with each other energy-intensive industries can decarbonise,
overseas, driving down prices as well as Mos- and Gazprom is eager to develop an early posi-
cow’s revenues. tion in this sector. The fuel can be produced in
many ways, although Gazprom’s laboratories are
Methane risks working on a methane pyrolysis technique that
Gazprom and other Russian oil and gas majors would produce it from natural gas, capitalising
are also mindful of being left behind in the on Russia’s abundant gas reserves. Pyrolysis also
energy transition, as their customers in Asia and produces solid carbon that can easily be stored or
Europe move towards cleaner forms of energy. utilised in various industries.
They have announced a raft of clean energy and Hydrogen can also be produced from water
decarbonisation initiatives over the past year that via electrolysis, with renewable energy power-
have been welcomed by investors, but it remains ing the process. But doing so is costly, and Rus-
to be seen whether these pilot projects will be sia lacks the spare renewable energy capacity
scaled up. to devote to production of this so-called green
Critically, Gazprom will need to prove to hydrogen. Some other Russian companies are
its customers how clean it can produce and looking at blue hydrogen, which is also pro-
transport its gas. But the company received duced from natural gas via steam reforming. But
unwelcome publicity in the summer, when data to make this hydrogen clean, resulting carbon
analytics firm Kayrros used satellite data to iden- emissions must be captured and stored, adding
tify a series of methane plumes coming from its to the expense.
infrastructure. Methane is many times more Gazprom has therefore turned to so-called
potent a greenhouse gas (GHG) than carbon turquoise hydrogen via pyrolysis as a solution.
dioxide, although it is released into the atmos- But it is yet to announce any pilot projects, rais-
phere in far smaller quantities. Methane emis- ing doubts about how quickly it can scale up
sions have moved to the centre of the climate production.
debate, as authorities in the US and EU consider Russia believes it can establish itself as a
additional measures to clamp down on them in major hydrogen exporter within the space of a
the energy sector. few years and supply as much as 12mn tonnes
There is currently no dedicated policy in place per year (tpy) of the fuel by 2035, according to a
to address energy sector methane emissions in government plan approved in August. But first
Europe. But the European Commission is due to Moscow must create the necessary regulatory
publish a legislative proposal to reduce emissions frameworks and incentive programmes to turn
later this year. It intends to propose “compulsory this lofty ambition into a reality. ™

P6 www. NEWSBASE .com Week 36 08•September•2021