Sakhalin-2 project negotiates green LNG supplies to Asia-Pacific Markets — CEO
The Sakhalin-2 project is negotiating the supply of pilot lots of environmentally friendly LNG to the Asia-Pacific markets, but buyers are not yet ready to pay extra for a carbon-free product, Sakhalin Energy CEO Roman Dashkov told reporters.
"This industry is generally new. We want to comply with the green agenda, therefore we are actively participating in this process. We are already implementing several pilot supplies of green LNG today, we have agreements," Dashkov said, adding that all of them are intended for markets of the Asia-Pacific region.
At the same time, he noted that the company should take into account the added value of such supplies.
"So far, we see the opposite trend — some kind of discount is required, buyers are not ready to pay extra for these products," he said.
LNG production is associated with high energy costs and CO2 emissions. In terms of specific greenhouse gas emissions, Sakhalin Energy's plant is considered one of the most environmentally friendly in the world and is second only to Norwegian projects, said Alexander Singurov, Deputy head for Production, head of the Prigorodnoye Production Complex.
"For ten years, we have reduced emissions in terms of specific indicators by 18%, and LNG production has grown by 20%," he said.
Singurov explained that in Western countries, production of environmentally friendly LNG on an industrial scale is possible with government support. In general, he estimated Sakhalin Energy's carbon emissions at 3.7-3.8 million tonnes per year.
According to Singurov, in pilot lots of Sakhalin Energy's "green" LNG, greenhouse gas emissions were offset by the purchase of carbon units. The cost of one such carbon unit on the global market ranges from $5 to $15. These carbon units are mainly tied to the natural potential of reforestation projects, he says. This potential is fixed by certificates, which are confirmed and verified by special international agencies, he explained. A company can sell the resulting carbon units or use it itself.
Sakhalin-2 is the first liquefied natural gas plant in Russia. It was launched in 2009, and a year later reached its full capacity — 9.6 mln tonnes of LNG per year. In the future, due to optimization of work, the company was able to further increase output, which made it possible to produce 11.6 mln tonnes of LNG in 2020.
The operator of the project is Sakhalin Energy, in which Gazprom owns 50% plus one share, Shell — 27.5% minus one share, Mitsui & Co. Ltd — 12.5%, Mitsubishi Corporation — 10%.
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"This industry is generally new. We want to comply with the green agenda, therefore we are actively participating in this process. We are already implementing several pilot supplies of green LNG today, we have agreements," Dashkov said, adding that all of them are intended for markets of the Asia-Pacific region.
At the same time, he noted that the company should take into account the added value of such supplies.
"So far, we see the opposite trend — some kind of discount is required, buyers are not ready to pay extra for these products," he said.
LNG production is associated with high energy costs and CO2 emissions. In terms of specific greenhouse gas emissions, Sakhalin Energy's plant is considered one of the most environmentally friendly in the world and is second only to Norwegian projects, said Alexander Singurov, Deputy head for Production, head of the Prigorodnoye Production Complex.
"For ten years, we have reduced emissions in terms of specific indicators by 18%, and LNG production has grown by 20%," he said.
Singurov explained that in Western countries, production of environmentally friendly LNG on an industrial scale is possible with government support. In general, he estimated Sakhalin Energy's carbon emissions at 3.7-3.8 million tonnes per year.
According to Singurov, in pilot lots of Sakhalin Energy's "green" LNG, greenhouse gas emissions were offset by the purchase of carbon units. The cost of one such carbon unit on the global market ranges from $5 to $15. These carbon units are mainly tied to the natural potential of reforestation projects, he says. This potential is fixed by certificates, which are confirmed and verified by special international agencies, he explained. A company can sell the resulting carbon units or use it itself.
Sakhalin-2 is the first liquefied natural gas plant in Russia. It was launched in 2009, and a year later reached its full capacity — 9.6 mln tonnes of LNG per year. In the future, due to optimization of work, the company was able to further increase output, which made it possible to produce 11.6 mln tonnes of LNG in 2020.
The operator of the project is Sakhalin Energy, in which Gazprom owns 50% plus one share, Shell — 27.5% minus one share, Mitsui & Co. Ltd — 12.5%, Mitsubishi Corporation — 10%.
Source