Singapore’s carbon-neutral ambitions for LNG supply received a major boost following the signing of a 10-year sales and purchase agreement (SPA) between wholly owned subsidiaries of Pavilion Energy and Qatar Petroleum
Under the SPA, QP Trading LLC will supply 1.8 mta of LNG to Pavilion Energy Trading & Supply Pte Ltd starting in 2023. Each LNG cargo delivered under this agreement will be accompanied by a statement of its greenhouse gas (GHG) emissions measured from well-to-discharge port.
Issued by Pavilion Energy on 31 March 2020, the tender for the SPA sought a reliable and competitive long-term supply to Singapore, and a commitment from LNG suppliers to co-develop and implement a GHG quantification and reporting methodology for LNG from well-to-discharge port. Pavilion Energy expects this methodology to become standardised as a common industry framework via a statement of GHG emissions, paving the way towards more environmentally responsible and sustainable natural gas strategies.
There is no fixed way as yet of providing carbon offsets, but it could involve three approaches: nature-based such as a reforestation project, community-based such as replacing coal-fired power generation with cleaner energy, or through investing in renewable energy and using those earned carbon credits to offset carbon emissions from another project.
The Pavilion Energy long-term SPA follows a recent single carbon-neutral LNG cargo supplied by Total to CNOOC.
“The inaugural LNG cargo Pavilion Energy imported into Singapore for downstream supply in 2018 originated from Qatar. We are delighted to enhance our strategic relationship with Qatar Petroleum, the world’s largest LNG producer,” said Pavilion Energy chairman Tan Sri Mohd Hassan Marican. “This partnership will strengthen our core Singapore market and our role as a global energy trader”.
Minister of State for Energy Affairs and QP president and chief executive Saad Sherida Al-Kaabi said the long-term SPA reflects QP’s “commitment to respond to the needs of our customers, including supply security, price competitiveness and flexibility.”
During the signing ceremony, Pavilion Energy chief executive Frédéric H Barnaud noted that “in the context of energy transition towards a low-carbon economy, this partnership is testament to the sustainability drive of both companies and the strong willingness of Pavilion Energy to pursue decarbonisation and offset strategies.”
Pavilion Energy’s tender was one of the world’s first for carbon neutral LNG supply, and groundbreaking for advancing Singapore’s ambitions. The tender sought the supply partners’ commitment to co-develop and implement a GHG quantification and reporting methodology for LNG.
The methodology, which will be developed based on internationally recognised standards, should cover emissions from the well-to-discharge terminal supply chain, and include LNG transportation.
Riviera is producing a range of technical and operational webinars and virtual events with the industry’s foremost experts. Sign up to attend on our events page