Oman LNG’s First Carbon-Neutral LNG Supply
Jun 09, 2021
Attesting to its robust efforts in delivering clean and reliable energy, Oman LNG has signed a pivotal agreement with Shell to deliver the Middle East first carbon-neutral1 LNG cargo utilising nature based offsets from Oman LNG’s world class facility in Sur. The cargo, which is expected to be delivered in the region, is the first carbon-neutral LNG from the Middle East using nature-based carbon credits to offset full lifecycle CO2 emissions generated across the LNG value chain; from exploring and producing the natural gas to its end use by the final consumer2.
Nature-based projects aim to protect, transform or restore land and enable nature to add oxygen and absorb CO2 emissions from the atmosphere. Such activities lead to the creation of ‘carbon credits’ where each credit represents the avoidance or removal of greenhouse gases. With more than half of global LNG demand by 2040 expected to be from countries with net-zero emissions targets, all levers need to be pulled to decarbonise LNG.
The current energy landscape worldwide is ever-challenging requiring mutual and intense efforts to be taken by energy companies; and adopting the most efficient practices to remain reliable and agile suppliers to customers.
The agreement inked represents a long-time history and relations between Oman LNG and Shell. Shell is a leading supplier of carbon-neutral LNG after delivering the world’s first cargoes in 2019 and many more subsequently. This collaboration allows Oman LNG to tap into the knowledge and expertise of Shell while it translates Oman LNG’s bold commitment towards knowledge sharing as well as exploring suitable mechanisms to reduce emissions. Natural gas is the cleanest-burning hydrocarbon, producing half the greenhouse gas emissions and less than one-tenth of the air pollutants of coal when used to generate electricity. Using nature-based offsets in conjunction with LNG provides a unique clean energy solution.
Environmental performance tops Oman LNG’s priorities since inception. Lately, the company has initiated a number of projects to eliminate its carbon footprint such as the on-going Power Project Plant at site. The move to introduce the gas engine power plant is to conserve natural gas and reduce emissions. Gas savings accumulated through this project are aimed at producing power for Oman LNG’s facility with less natural gas by optimising gas resources and therefore yielding less environmental emissions.
These efforts by the company complement the Sultanate’s Vision Oman 2040 which focuses on four main axes; one of which is themed “environment whose resources are sustainable”. This axis covers aspects of the environment performance and natural resources, which puts significant emphasis on environmental perspective to be considered during the creation of policies, decisions making in industrial planning and implementation.
Speaking on the agreement, Hamed Al Naamany, CEO of Oman LNG commented “Oman LNG has taken major steps over the past few years such as introducing new technologies and replacing machines to reduce its greenhouse gas emissions. Our role in protecting and restoring the natural ecosystems could play an important role in limiting global warming. These changes ultimately ensure the efficiency and sustainability of our plant and machinery.” Al Naamany continues, “Using high-quality nature-based offsets for Oman LNG’s first carbon-neutral LNG cargo offering is a testimony of our commitment to the environment, and our focus on decarbonisation. We continue to be amongst the top quartile of the premium LNG market, and aim to remain in this position post-2025”.
Oman LNG provides cleaner and efficient LNG to customers from which tangible value is reached for the Sultanate of Oman and its people through a wide swath of social investment programmes that addresses many economic and social needs, including avenues to generate In-Country Value and Small Medium Enterprises (SMEs) development. The LNG industry in Oman has now grown to be the largest income earner for the Sultanate, after oil.
1 The CO₂e lifecycle emissions of this product have been offset with verified Nature-Based Carbon Credits.
2 DEFRA Greenhouse gas reporting: conversion factors 2020 will be used to calculate GHG emissions.