Page 5 - Euroil Week 43 2020

EurOil COMMENTARY EurOil

France is concerned
about the emissions
produced from US gas.

This line of reasoning may not be valid for of LNG.
France, however, whose energy mix is domi- This has come as the global LNG market
nated by nuclear power and renewables. Coal has become increasingly oversupplied, making
accounts for a mere fraction of French electric- competitive advantage all the more important.
ity – only 0.3% last year. In NextDecade’s case, the company hopes that
France’s ban on fracking on its own soil in dramatically lowering its emissions will make its
2017 was symbolic, as the country has barely output more attractive in a world that is pivoting
any domestic oil and gas resources. For several towards lower-carbon options.
years, lawmakers have called for a ban on fracked A handful of developers globally are also
imported gas, but this would be very hard to talking up the lower emissions profiles of their
implement. Recently the government also pro- facilities. The Royal Dutch Shell-led LNG Can-
posed phasing out state export guarantees for all ada is pursuing a similar goal, and plans for its
oil projects by 2025 and all gas ventures by 2035. emissions to be 35% lower than the world’s best
performing facilities and 60% lower than the
Lowering emissions global weighted average among already opera-
It is unclear whether there is any connection tional facilities. And another net-zero emissions
between French actions and an announcement project is potentially on the table in the US. G2
by NextDecade on October 6 that it would strive Net-Zero LNG, launched earlier this year, is
to reduce anticipated CO2 emissions at Rio proposing an $11bn project in Louisiana to liq-
Grande by 90% using carbon capture and stor- uefy and export natural gas, as well as producing
age (CCS) technology and other processes. The industrial gases, with net zero greenhouse gas
company said it was also exploring options to (GHG) emissions from 2026.
address the remaining 10%. Like NextDecade, G2 Net-Zero LNG is pro-
What is known, however, is that NextDecade posing a CCS component to its project. And
has been working on reducing emissions from the two companies are not alone in turning to
Rio Grande for at least the last few months. Prior CCS alongside liquefaction. State-owned Qatar
to the latest announcement, the company said in Petroleum (QP) is also building a CCS facility
July that it had redesigned Rio Grande to com- alongside its expansion of liquefaction capacity,
prise more efficient trains that would result in while such a facility already exists at Chevron’s
lower CO2 emissions. Gorgon LNG project in Australia. The project’s
The new plan envisaged five trains instead start-up was significantly delayed as a result of
of six, still producing a combined 27mn tpy but technical challenges but it has stored more than
resulting in 21% fewer CO2 emissions. This has 3mn tonnes of CO2 to date.
since been superseded by the latest proposal, However, the reported delay in Engie’s deal
which aims for carbon neutrality. However, it with NextDecade illustrates that cutting direct
illustrates ongoing efforts by NextDecade to emissions – known as Scope 1 emissions –
gain a competitive edge by positioning itself as from a given liquefaction facility may not be
a low-emissions – or no-emissions – producer enough.™

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