TotalEnergies, Novatek sign pact to look at CCS from LNG

London, (Quantum Commodity Intelligence) - Oil major TotalEnergies has signed a memorandum of understanding with Russian gas producer Novatek to cut emissions from the process of liquefying natural gas with the aim of storing the emissions in northern Russia.

The two companies said in a statement that they plan on improving the emissions intensity of LNG by exploring carbon capture and storage technology, improving energy efficiency and evaluating whether renewable sources of power can be used to drive down the carbon intensity of super-cooling gas for transportation.

"Our two companies are joining forces to deliver sustainable solutions to reduce emissions from our LNG projects and to provide low-carbon LNG to our customers," said Patrick Pouyanne, chairman and CEO of TotalEnergies.

TotalEnergies, which has recently rebranded itself from Total in a bid to rid itself of its fossil fuel image, is the second largest LNG producer in the world, with a global market share of 10%.

It owns a near 20% stake in Novatek and Yamal LNG – a producer that started up in December 2017 and produced 19 million mt of LNG last year.

LNG – highlighted as a bridging fuel a decade ago to help the world cut emissions while keeping the lights on – is one of the most carbon-intensive processes as vast amounts of energy are needed to freeze, warm up and transport the gas.

It is increasingly being used as a bunker fuel, although the World Bank has stated that it should not be used as an alternative to shipping fuel due to its carbon intensity.

LNG prices have reached all-time highs this year as a cold snap in Asia and record carbon prices in Europe that is triggering a move away from coal as a generation fuel has created additional demand.