Decarbonising the LNG Industry | Page 2

the reference to a “ phase-out ” of unabated coal power was replaced with a reference to a “ phasedown ” near the end of the summit . Indeed , after coal use fell globally in both 2019 and 2020 , global coal use grew in 2021 by an estimated 9 % to be the highest annual consumption on record . ⁶ One of the reasons cited for the increase use of coal in Europe in particular was the steep rise in natural gas prices ( over 800 % between January and December 2021 , with LNG cargoes delivered ex-ship North West Europe reaching record prices of $ 41.946 / MMBtu in December ). ⁷ ⁸ Increased reliance on coal is a big concern if climate change targets are to be met , and serves to highlight the importance of continuing to include a material role for natural gas and LNG as part of the energy transition .

Where do greenhouse gas emissions arise in the LNG value chain ?

The LNG value-chain can be split into the three elements :

• upstream – natural gas extraction and production , transportation and liquefaction ;

• midstream – LNG transportation ; and

• downstream – LNG regasification and combustion ( i . e use of the regasified LNG as a fuel ).

The Upstream and Midstream

Approximately 25 % of CO2-equivalent (“ CO2e ”) emissions arise in the upstream and midstream sections of the LNG value chain . ⁹ In the upstream , methane emissions arise through intentional venting ( usually of associated gas in upstream operations focused on oil production and therefore not particularly relevant in the LNG value chain ), intentional release in emergency scenarios and as fugitive emissions , such as through accidental leakage in infrastructure . There are also significant CO2 emissions associated with upstream gas production and in the liquefaction process , for example in flaring of gas ( again more relevant to upstream operations focused on oil production ) and through the powering of drilling and operational machinery , as well as in powering the energyintensive liquefaction process . Natural gas production and liquefaction infrastructure is often powered by the burning of natural gas or other hydrocarbons , resulting in emissions of between 10 – 25 % of overall GHG emissions for the production of natural gas and transportation to the liquefaction plant , with the liquefaction process typically accounting for between 6 – 10 % of overall GHG emissions .¹ ⁰

The midstream , being the transportation of natural gas once liquefied ( i . e . LNG ), is also responsible for both methane and CO2 emissions . LNG ships typically burn marine fuel oil or natural gas ( from boil-off of the LNG being transported ) producing CO2 emissions on combustion . Methane leakage or methane slip may also occur , particularly with older LNG ships , with non-combusted methane being released into the atmosphere .

The Downstream

The downstream element is responsible for the most GHG and particulate emissions in the LNG value chain , with a standard cargo of 70,000 metric tonnes (“ MT ”) of LNG , once regasified and combusted , resulting in 190,000 MT of CO2e .¹¹ These emissions arise when LNG is regasified and subsequently combusted ( for example in power plants ). The regasification process is typically responsible for between 1-3 % of overall emissions , a tiny proportion of emissions as a whole .¹² The end combustion of natural gas , however , is responsible for emissions in excess of 60 % of the overall LNG value chain . Whilst this highlights the intensity of emissions associated with the use of natural gas in power generation , as noted above , these remain comparatively low when compared to other baseload power alternatives such as coal , which produces twice as many GHG emissions as natural gas .

What is Green Gas / LNG ?

There are several ways in which natural gas and LNG can be produced and used in a way that limits its detrimental effect on the environment such that it is characterised by some as “ Green LNG ”. These include :

• reducing the greenhouse emissions associated with the upstream production of natural gas ;

• utilising CCS in respect of CO2 emissions associated with the upstream production of natural gas , the liquefaction process used to produce LNG and the regasification process ;

• offsetting the carbon emissions associated with the production , transportation and use of LNG ;

• the use of alternative sources of natural gas , such as socalled “ bio-LNG ”; and

• LNG blended with hydrogen .

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