SINGAPORE (Reuters) – Singapore’s Pavilion Energy is asking potential liquefied natural gas (LNG) suppliers to help develop an industry standard for the superchilled fuel’s total greenhouse gas emissions, as it looks for new gas deliveries from 2023.
One of two companies approved to import LNG into Singapore, Pavilion also urged sellers to outline their carbon mitigation efforts as it aims to eventually make its purchases carbon neutral.
While LNG is typically considered a cleaner fuel than coal or oil, there is no accepted industry standard for measuring the emissions from producing and transporting the fuel, which needs to be cooled to minus 162 degrees Celsius.
“We believe that the attractiveness of natural gas as a transition fuel must be reinforced by a better understanding and then reduction of its carbon footprint,” Pavilion group chief executive Frederic Barnaud said in an emailed statement to Reuters.
Owned by Singapore state-owned investment company Temasek Holdings [TEM.UL], Pavilion is soliciting bids through a request for proposal for up to 2 million tonnes per annum (mtpa) of LNG for delivery from 2023 for a period of at least five years.
In what the company said is a world first, it is asking suppliers to commit to jointly develop and implement a greenhouse gas quantification and reporting methodology, covering emissions from the well to the discharge terminal.
Carbon neutral LNG typically involves companies supporting nature-based projects that reduce emissions to compensate for emissions generated from exploration and production.
Pavilion’s move comes as carbon reduction targets tighten globally, leading to a gradual push for more transparency of carbon and methane emissions in the gas value chain.
Barnaud said there are currently ways to calculate greenhouse gas emissions for a single LNG cargo transaction, but there is no standardised methodology to measure, report and offset emissions in a transparent and verifiable manner.
Pavilion also wants to work with other companies to promote standardisation, certification and price transparency for emissions reduction or offset certificates in Asia and to develop a marketplace and trading hub, he said.
The company is also looking into studying hydrogen as a complement to natural gas, he said.
Royal Dutch Shell in June last year supplied what it said was the world’s first “carbon neutral” LNG cargoes to Japan’s Tokyo Gas and South Korea’s GS Energy. It also supplied a similar cargo to Taiwan’s CPC Corp last month.
Pavilion is owned by Singapore state-owned investment company Temasek Holdings [TEM.UL]. The deadline to submit bids for its tender is in June.
Reporting by Jessica Jaganathan; editing by Richard Pullin