Liquefaction plants in the Asia Pacific region could reduce their emissions by 8% if they run on renewables power instead of feedgas, Wood Mackenzie said on Monday.
According senior specialist Jamie Taylor, the region produces over a third of the global liquefied natural gas (LNG) supply, but also generates over 50 million tonnes of CO2 equivalent (MtCO2e) of emissions during liquefaction. In Australia, emissions stand at around 29 MtCO2e.
Taylor estimates that by powering the LNG trains on electricity produced from renewables, particularly solar power, the plants could cut their emissions, benefit economically and prolong the project’s resources, Kallanish Energy reports.
The decarbonization call is also linked to social acceptance. Buyers are looking more closely at the emissions associated with cargoes they are procuring. Stricter project financing criteria, especially from European banks, is another cause for concern for companies developing capital-intensive greenfield projects.
Yet, Taylor believes the biggest driver for decarbonization is the potential for carbon tax or tighter regulations in both exporting and importing countries. “This would significantly impact the already strained project economics post oil price crash,” according to WoodMac.
“We are already seeing Australian LNG plant operators examining ways to reduce carbon emissions throughout the value chain. Initiatives are underway at the upstream assets supplying the North West Shelf and QCLNG, and Darwin LNG has installed a battery that reduces the need to run one of the gas turbines,” he said.
“Our analysis shows that installing renewable energy generation could reduce emissions at Asia Pacific’s LNG plants by 8% in 2020 alone,” added Taylor.
Other ways to reduce emissions is by increasing efficiency at the liquefaction process and installing carbon capture technologies.