Singapore’s biggest buyer of liquefied natural gas is poised to take a major step toward squeezing down pollution from the fuel — on paper at least.
Pavilion Energy Pte Ltd. is asking sellers of LNG to quantify greenhouse gas emissions associated with each LNG cargo produced, transported and imported into Singapore. It’s also encouraging bidders to offer carbon offsets as part of sales deals.
The terms are attached to a major tender for LNG purchases that will stretch more than five years into the future. They’re the first and most extensive environmental terms to be included in an offer to buy cargoes of the super-chilled gas, which change hands for millions of dollars each.
“I expect this to become a norm,” Pavilion Energy Chief Executive Officer Frederic Barnaud said in an interview from London. “It is not just a supply tender. It’s also building up partnerships that will last for many years and hopefully will also have an impact on the industry.”
Pavilion offered to buy as much as 2 million tons of LNG a year for five years and more, starting from 2023, according to Barnaud. It marks the first time that environmental criteria were included in what’s otherwise a standard bidding process in the LNG industry.
The emissions reductions and carbon offsets that LNG sellers might offer with their cargoes could include forest conservation or significant renewable power generation that would not have otherwise be developed.
Click here to read about Shell’s plan to offer carbon offsets with its fuel
Singapore is striving to become a hub for LNG and expects the methodology that Pavilion is using to become standardized as the trade grows. Others in the industry from retailers to utilities may well follow.
