Characteristics, Drivers of Emerging Carbon-Neutral LNG Market
LNG players are sourcing responsibly-produced gas, purchasing offsets, and planning on-site carbon capture and storage to mitigate or fully eliminate lifecycle GHG emissions The number of bilateral carbon-neutral transactions this year has already exceeded 2020 levels – six through April 2021 versus five in 2020, according to FTI tracking. Across Asia, Japanese, Singaporean, South Korean and Chinese firms have all purchased carbon-neutral LNG cargoes in Q1 2021, with each delivery’s carbon dioxide profile reduced via offsets.
Several LNG projects globally have Carbon Capture and Storage (CCS) facilities attached to their respective projects: Gorgon in Australia, Snohvit in Norway and Qatar’s Ras Laffan. This amounts to roughly 17% of global capacity for 2021. Adding in what is proposed on existing capacity brings the total to 38% of global capacity. A number of proposed projects, many in the US, have announced plans to add CCS to their liquefaction operations with announcements to date amounting to 67 million metric tons per annum (MTPA) or 9 bcf/d of carbon-mitigated liquefaction.