Page 7 - AsiaElec Week 11 2021

AsiaElec COMMENTARY AsiaElec

commented that “the bar for transitional energy supplying information on the emissions asso-
solutions is rightly being raised”. ciated with its cargoes to customers. Cheniere’s
“We anticipate demand for carbon-miti- president and CEO, Jack Fusco, noted at last
gating energy solutions to grow as the world week’s CERAWeek by IHS Markit conference
focuses on achieving net zero,” added Vitol’s that the company had reduced its emissions
head of emissions trading, Michael Curran. intensity by de-bottlenecking its plants, adding
Other steps towards tracking – and ulti- that it expected to continue leading on climate
mately reducing – the emissions associated issues.
with LNG cargoes have already been reported
on by GLNG in recent weeks. These include the What next?
deal struck in February by Singapore’s Pavilion There is some way to go until the new generation
Energy with Chevron in February, under which of proposed low-emissions LNG plants will be
around 500,000 tonnes per year (tpy) of LNG built – assuming they proceed to construction.
will be supplied to Singapore from 2023. Each However, the developments seen in recent weeks
LNG cargo delivered under this agreement illustrate that both buyers and sellers of LNG are
will be accompanied by a statement of its GHG beginning to take steps towards carbon-neutral
emissions, measured from wellhead to dis- cargoes.
charge port. Little has been said about cost by those begin-
Pavilion already has a similar agreement ning to trade carbon-neutral LNG, because the
in place with Qatar Petroleum (QP), having price of individual cargoes is generally confiden-
launched a tender last year seeking partners that tial, but it will be higher than that of standard
would help it to develop an industry standard cargoes. This presents a challenge for those seek-
for measuring LNG emissions. It was also seek- ing to be competitive by lowering costs. While
ing to mitigate its own emissions, and ultimately the cost of carbon-neutral LNG will come down
make its own purchases carbon-neutral. over time, this is set to be one of the major chal-
Also in February, leading US LNG producer lenges involved in the shift towards low-carbon
Cheniere Energy announced that it would start and carbon-neutral variants of the fuel.™

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