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The biggest oil and gas corporations must do more to reduce their emissions from assets in Africa, with moves to address gas flaring and to cut emissions from planned and future LNG projects, Wood Mackenzie said in a report carried by Bloomberg.
Africa hosts some of the most polluting assets because of a lack of infrastructure to solve the gas flaring problem, Bloomberg notes.
“Reducing emissions and considering new energy diversification is really unavoidable,” WoodMac said in the report.
As investors want proof of solid efforts for emission reduction, international oil majors should work to address the problem in Africa, where new liquefied natural gas (LNG) projects are being planned.
New LNG projects would only be investable for banks and funding partners if they have plans to offset the emissions from the liquefaction process, according to Wood Mackenzie.
“Targeting full life-cycle emissions across the entire LNG industry is a big ask, but progress towards emissions reduction in the upstream, liquefaction and transportation of LNG is coming into focus and at the very least, proof or visibility of supplier carbon credentials will become the norm,” Gavin Thompson, Vice Chairman, Energy - Asia Pacific, at Wood Mackenzie, has said recently.
The future of gas investment is “lean, mean, and going green,” Thompson wrote last November.
Upstream producers and LNG developers have started to heed environmental concerns about natural gas as LNG buyers have increased their scrutiny of the carbon credentials of the cargoes they look to contract. Inevitably, the economics of future LNG projects will change. Developers will be looking (and they already are) to pitch their projects as a lower-emission facility than those of their rivals. At the same time, banks and other capital providers will agree to finance the construction of LNG facilities only if they are coupled with emission-reduction technology.
By Michael Kern for Oilprice.com
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Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com,