Cheniere to tag LNG cargoes with GHG emissions data

US firm Cheniere Energy plans to provide greenhouse gas (GHG) emissions data to accompany each cargo that it sells to customers from its 25mn t/yr Sabine Pass and 15mn t/yr Corpus Christi LNG facilities in the US, starting in 2022.

Cheniere sees the cargo emissions tags as helping to enhance environmental transparency by quantifying the estimated GHG emissions of each LNG cargo from the gas wellhead to the delivery discharge point.

These tags will help buyers understand the impact of purchasing an LNG cargo from an emissions perspective, compared to alternatives, Andrew Walker, Cheniere's director of strategy, said during a panel discussion at the IPWeek conference today.

Suppliers are looking at how to reduce their carbon footprints and Cheniere has received a lot of interest from customers to "work with them…along the value chain" in this regard, he said.

Recent pledges by LNG consuming and importing countries in Asia to achieve net zero carbon emissions by 2050-60, as part of an energy transition away from fossil fuels towards cleaner and more sustainable forms of energy, have encouraged some LNG market participants to work towards measuring and verifying GHG emissions from LNG cargoes with an eye to offsetting these emissions.

Singapore's Pavilion Energy earlier this week signed a second LNG supply agreement that included plans for offsetting carbon emissions. The deal with Chevron was for 500,000 t/yr of LNG starting 2023, under which Chevron is required to document the carbon footprint of each cargo it delivers.

Pavilion signed an earlier deal in November last year with Qatar Petroleum for 1.8mn t/yr of LNG. This was the company's first deal that also required the supplier to collaborate on creating a methodology for quantifying and reporting on the CO2 emissions involved in the production of an LNG cargo, from the well to the delivery point.

It is unclear if the quantification and verification of GHG emissions will encourage a pick-up in demand for carbon-neutral LNG cargoes, for which only a few transactions have been done on a spot basis.

Shell, Total and Japan's Jera Global Markets (Jeragm) have collectively sold around nine carbon-neutral LNG cargoes on a spot basis to Asian buyers since June 2019.

An LNG cargo is considered carbon neutral if CO2 or GHG emissions at various stages along the LNG value chain are removed from the atmosphere by using carbon capture and storage processes, reducing flaring and using renewable power.

By Camille Klass