BP and Pavilion ink deal to supply LNG to Singapore, eye CO2 offsets

London (Quantum Commodity Intelligence) - Oil major BP and energy trader Pavilion Energy have signed a 10-year LNG deal that will see the former supply 800,000 mt of super-cooled gas to the city state of Singapore.

In a statement Wednesday, both companies said that the deal will commence from 2024 and will involve reporting of wellhead to discharge emissions of greenhouse gases.

The carbon reporting element of the deal is thought to lead to the offset of those emissions with the use of carbon credits.

Frederic Barnaud, CEO of Pavilion Energy, said, "This agreement further strengthens our relationship with bp as Pavilion Energy advances our strategies for a lower carbon future, beginning with GHG emissions quantification, reduction and offsets for Singapore."

The move comes as energy companies are under pressure to reduce emissions, with BP itself having a target to become "net zero" emissions by 2050 "or sooner".

Analysts say for that to happen, such companies need to employ a range of technologies, such as carbon capture and storage, as well as offsetting emissions through carbon reduction projects.

Earlier this year the Singapore Exchange launched a new carbon offset contract to allow companies to buy and sell offsets from projects that cut emissions.