Two oil and gas operators on the Sakhalin Island in the far east of Russia, ExxonMobil-led Exxon Neftegaz and Gazprom-led Sakhalin Energy, have voiced their support for a regional initiative to reach carbon neutrality by 2025, after a meeting with local authorities earlier this week.
According to Russian media reports, Sakhalin authorities are moving forward with a plan, approved earlier this year by Moscow, to introduce regional carbon monitoring for companies with annual carbon dioxide emissions of 20,000 tonnes or more.
The initiative also calls for establishing a regional platform to offset and exchange CO2 emissions and quotas.
Pivotal points of the initiative are the planned expansion of forest on the island, to achieve higher CO2 absorption rates and the more direct reduction of greenhouse gas emissions by switching customers away from diesel fuel and coal to natural gas.
In their latest presentation, Sakhalin authorities have assessed the annual forest absorption rate at 11.1 million tonnes of CO2 against estimated CO2 emissions on the island of 12.3 million tonnes.
Authorities estimate that forests cover 68% of the total territory of an island where the population is concentrated in the north-eastern and southern regions.
Authorities are also planning to convert all public and commercial transportation and residential heating systems to electric and natural gas instead of diesel fuel, petrol and coal.
In total, Sakhalin government expects that already approved and planned measures will reduce greenhouse emissions on the island by almost 1.5 million tonnes of CO2 in 2025 against the base level of 2019.
Greener LNG promised
Sakhalin Energy, which operates a liquefied natural plant in the south of Sakhalin as well as two oil and gas offshore fields under Sakhalin 2, also announced the signing a strategic partnership agreement with one of its main customers, Japan’s Toho Gas.
The agreement calls for co-operation in supplies of so-called "green" LNG, with first cargo slated to sail from the Sakhalin Island to Japan in October.
Green, or carbon-neutral LNG earns this label when an operator demonstrates the ability to reduce and offset Scope 1 and 2 emissions during gas production and liquefaction.
Anglo-Dutch supermajor Shell — a minority shareholder in Sakhalin Energy — also signed a memo of co-operation with the Sakhalin government to provide assistance in reforestation and carbon capture and storage proposals.
Coal operator eyes wind
Another regional operator, Eastern Mining, is also understood to be researching options for participating in the decarbonisation initiatives having already contracted a subsidiary of Russian state nuclear corporation Rosatom, NovaWind, to install a wind turbine power facility in the Uglegorsk district on Sakhalin where it operates coal mines.
The facility, rated at 67.2 megawatt per year, is slated to come into operation in 2024 and has been touted as potentially reducing the company's carbon footprint by 125,000 tonnes of CO2 per year.
With such carbon offset mechanisms in hand, Sakhalin authorities actually expect gas production on the island to grow to 35 billion cubic metres in 2024 against expected 30 Bcm this year, although oil output is anticipated to fall by 3% to 297,000 barrels per day.
In the long term, Russian authorities expect operators Exxon Neftegaz, Sakhalin Energy and Gazprom to continue with their projects to maintain and grow gas output in the region.
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