Singapore's Pavilion Energy, along with gas suppliers QatarEnergy, and Chevron, on Nov. 17 unveiled a methodology for quantifying and reporting greenhouse gas emissions for delivered LNG cargoes, Pavilion said.
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The Statement of Greenhouse Gas Emissions, or SGE methodology, will be applied to sales and purchase agreements between Pavilion and the two gas suppliers, and can be used by other LNG suppliers to assess the emissions footprint of LNG cargoes, according to Pavilion.
The methodology will allow the use of tools, such as, carbon offsets to decarbonize gas and sell carbon neutral LNG downstream to customers.
It covers the life cycle of gas, from the wellhead to the delivery point, for emissions associated with gas production, gathering, processing, transport, liquefaction, storage and loading, shipping, and unloading at the delivery port.
Emissions from the liquefaction facility include all activities related to gas conditioning, cooling, storage, and loading, up to the loading manifold of the LNG shipping vessel. Emissions related to LNG shipping include emissions from the laden voyage, both in port and at sea, the inward ballast voyage and inbound port activities.
It, however, does not cover emissions associated with regasification and downstream processes, such as, transmission, distribution, and end-use consumption in sectors, including, power generation.
The methodology "is therefore not intended to represent a full life cycle assessment of emissions associated with LNG," in what Pavilion calls a cradle-to-gate approach, as opposed to a cradle-to-grave approach, based on estimates that combustion accounts for around one-fourth to one-third of the full emissions of an LNG cargo.
"If offsets have been applied, then these may be reported separately from the SGE. Carbon capture and storage within the production process is not considered offsetting," Pavilion said.
The SGE methodology complements some of the industry efforts being developed in parallel to quantify emissions, such as, the Monitoring, Reporting, Verification (MRV) and GHG Neutral Framework by the International Group of LNG Importers (GIIGNL) announced Nov. 17.
The setting up of industry wide norms is a critical step in standardizing emissions measurement, as discrepancies in calculations and the lack of transparency hinder the process of decarbonization of fossil fuels and energy transition.
The SGE methodology facilitates comparison across different types of LNG and co-products, such as, natural gas liquids and different shipments of LNG originating from various locations.
It is based on emissions of three main gases -- carbon dioxide, methane, and nitrous oxide -- from sources, including, flaring, venting and fugitive emissions, as well as emissions from imported electricity and heat.
It will also use a 100-year period of the global warming effect from the gases, instead of a 20-year period, to maintain consistency of reporting with corporate inventories and offset accounting.
Pavilion Energy imported Singapore's first carbon neutral LNG cargo in April, after penning term offtake deals with Qatar Petroleum and Chevron for 1.8 million mt/year and 0.5 million mt/year, respectively, of LNG supplies.
Professor Jonathan Stern of The Oxford Institute of Energy Studies, Japan's largest utility JERA, maritime consultancy Lloyd's Register, and shipping groups Maran Gas Maritime Inc. and Flex LNG, contributed to the methodology.