Shell and PetroChina sign world's first long-term carbon-neutral LNG deal

Quantum Commodity Intelligence - Energy major Shell and China's state-owned PetroChina have agreed the world's first long-term contract for the supply of carbon-neutral liquified natural gas (LNG), the companies announced Monday.

The announcement coincided with the delivery of the first-carbon neutral LNG cargo to PetroChina at China's Dalian port under the deal, which will run for five years.

The companies will cooperate to offset whole life-cycle carbon emissions related to the LNG value chain, using 'high-quality' carbon credits from nature-based projects, said a Shell statement.

The carbon credits used to offset life-cycle emissions generated from the cargo delivered Monday come from Shell's global portfolio of emission reduction projects, the statement added.

"As more ways to avoid and reduce emissions develop at scale, the industry needs to work together to use high-quality carbon credits to compensate for greenhouse gas (GHG) emissions along the LNG value chain that are otherwise hard-to-abate," said the Shell statement.

China vies with Japan for top-spot as the world's largest LNG importer and its imports are expected to nearly double by 2040, compared to the 67 million mt imported last year.

"In pursuit of the carbon neutrality goal, PetroChina is committed to a green and low-carbon development strategy. We are pleased to partner with Shell, through this cooperation in carbon-neutral LNG, in realising the long-term objective of net zero emission for the energy industry," said Mr. Tian Jinghui, Executive Chairman of PetroChina International.