Russia’s Sakhalin Energy plans carbon-neutral LNG cargoes

Sakhalin Energy, the operator of Russia’s Sakhalin-2 liquefaction facility in the port of Prigorodnoye, plans to start offering carbon-neutral LNG cargoes to its clients.

The company’s shareholders include operator Gazprom, major partner Shell, and Japan’s Mitsui and Co., and Mitsubishi Corporation.

Gazprom and Shell have earlier this year teamed up on Europe’s first carbon-neutral LNG shipment. Shell has also previously delivered several carbon-neutral shipments in Asia and the latest from the US to Europe.

Based on experience from its shareholders, Sakhalin Energy is looking to include the offering into its portfolio as well.

The company said it has developed the “green LNG” strategy which includes four key lines.

The first includes environment‑based solutions including measures to increase greenhouse gas absorption, such as reforestation and planting of new forests, it said in a statement.

Moreover, the firm plans to raise the efficiency of production processes involved in the reduction of specific emissions.

The third point entails commercial activities related to carbon‑neutral LNG supply while the fourth includes progressive solutions to create an “energy cocktail” based on alternative technologies that “drastically” reduce greenhouse gas emissions, it said.

“These may involve the use of renewable energy sources, hydrogen, and conversion of sea and land transport to liquefied natural gas,” Sakhalin Energy said.

Buyers interested

The Sakhalin-2 LNG facility produced and shipped record 11.6 million tonnes of LNG last year. This is equivalent to 178.6 standard cargoes.

It started producing LNG back in 2009 with an design capacity of 9.6 mtpa, but due to technical improvements and upgrades, together with weather and temperature conditions, production rose by 20 percent.

Most of these volumes land in Japan, followed by South Korea, Taiwan, and China.

Sakhalin Energy recently held its regular annual meeting with Japanese buyers where they expressed interest in receiving carbon-neutral LNG cargoes, according to a separate statement.

The customers from Japan include JERA, Tokyo Gas, Toho Gas, Kyushu Electric, Tohoku Electric, Osaka Gas, Hiroshima Gas and Saibu Gas.

Tokyo Gas has also earlier this year said that fifteen Japanese firms have joined forces to establish a carbon-neutral LNG alliance as they seek to further slash emissions.

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