BAKU, Azerbaijan, Dec.1
By Leman Zeynalova – Trend:
Liquified natural gas (LNG) supply is expected to grow over the near term, Trend reports with reference to Fitch Solutions.
“Although the low-carbon LNG market remains at a nascent stage, producers are displaying an increasing willingness to offer low-carbon or carbon-neutral cargoes and we expect supply will increase over the near term,” said the company.
Fitch Solutions notes that while LNG is often seen as a cleaner and more environmentally friendly option over other fossil fuels, such as coal or oil, it remains a key emitter of carbon.
“Carbon emissions are generated throughout the supply chain of LNG starting at upstream natural gas production through liquefaction, regasification and combustion by the end user. The latter remains the key contributor of emissions to the whole LNG supply chain according to a number of publications by various organizations. Based on the GHG Conversion Factors Tool provided by the UK government, approximately 75 percent of emissions associated with LNG cargoes are generated by the combustion of natural gas in power plants. Shell, in its latest "2021 LNG Outlook", indicates that the GHG emissions from the consumption of natural gas make up around 80 percent of emissions associated with LNG. According to ICF, the share of emissions generated by power plant operations lingers at 73 percent, as presented above,” the company said.
The other stages, especially upstream processes and liquefication, which requires the cooling of natural gas to minus 162° Celsius, also emit substantial amounts of carbon dioxide and methane. We highlight, however, that the share of various value chain components in total LNG life-cycle emissions will depend on the region and technology used to source natural gas and advancements in LNG plants and power plants, to name a few.
“LNG producers have responded to growing concerns regarding the emissions of traditional LNG cargoes by beginning to offer low-carbon and carbon-neutral alternatives. Over 2021, we have seen a gradual uptick in reports of legacy LNG
producers having made their first carbon-neutral LNG deliveries across the globe. In our view, the market is only just taking off and has much further to grow over our long-term forecast period,” reads the report.
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