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Tariq Siddiqui's picture
COO Upstream EP Advisors LLC

Oil & Energy | Business Development | Capital Projects | Offshore Wind - Proven leader in offshore development and operations, with 25+ years’ expertise in managing business through cycles of...

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  • Jun 15, 2021 10:29 am GMT
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The green energy drive is changing the way LNG developers and sellers are planning for future projects as buyers are increasingly demanding proof that the cargoes they have paid for are “green”—that is, carbon neutral.  

KEY INSIGHTS & CHALLENGES

  1. METHANE LEAKAGES: In just a few years, the image of natural gas markedly shifted from the bridge fuel of the energy transition to just another fossil fuel that emits an even more polluting and dangerous gas than carbon dioxide—methane. 
  2. EMISSION FROM ENTIRE VALUE CHAIN: The wave of net-zero pledges from governments and businesses has shifted the focus of the liquefied natural gas (LNG) market onto the carbon footprint of the entire LNG supply chain— from the extraction and liquefaction of LNG to shipping, re-gasification, and emissions generated by end-users. 
  3. CARBON CREDENTIALS: Over the past two years, amid the net-zero and clean energy push, LNG buyers have increased their scrutiny of the carbon credentials of the cargoes they look to contract.
  4. SHIFTING TRENDS IN LOW CARBON LNG: Beginning of a major trend in the global LNG market to make the ‘cleanest’ fossil fuel even cleaner by offsetting emissions with nature-based projects and directly reducing pollution at the liquefaction stage with carbon capture and storage (CCS) solutions. 

BOTTOMLINE

Inevitably, the economics of future LNG projects will change. The banks and other capital providers will agree to finance the construction of LNG facilities only if they are coupled with emission-reduction technology. 

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Matt Chester's picture
Matt Chester on Jun 15, 2021

In just a few years, the image of natural gas markedly shifted from the bridge fuel of the energy transition to just another fossil fuel that emits an even more polluting and dangerous gas than carbon dioxide—methane

The 'bridge fuel' narrative was deviously genius-- it is indeed better to have gas generation than coal from a carbon perspective, but this line allows for the build out of massive infrastructure without consideration of whether those assets are something we'll collectively want operating 10 to 20 to 30 years from now. It's good to see that market forces, consumer sentiment even, are pulling back the sheet. 

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