Russia's Novatek is aiming to take a final investment decision early next year on what would be the country's first carbon capture and storage project as the gas independent aims to drive down emissions from its vast liquefied natural gas developments in the region.

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The move comes as global oil and gas players scramble to reduce the carbon intensity of their businesses amid the fast-paced energy transition, which has already seen players plough resources into renewable energy projects and look for ways to produce oil and gas more cleanly.

Speaking at the CERAWeek by IHS Markit virtual conference on Wednesday, Novatek deputy chairman Mark Gyetvay said the “world is changing and it needs more gas than less gas”.

Novatek is working on several LNG projects in West Siberia — such as Yamal LNG — that are aimed at pushing its annual LNG exports to 70 million tonnes by 2030 and eventually to over 120 million tonnes.

Carbon injection studies completed

With LNG buyers increasingly looking for cargoes produced with lower emissions, Novatek is assessing options for the disposal of carbon dioxide and reduction of emissions in its areas of operation.

The company’s first project, Yamal LNG, is currently producing 2.6 tonnes of CO2 per tonne of LNG. The industry standard is about 0.4 tonnes of CO2, Gyetvay said.

Novatek has recently completed a subsurface geological study at the South Tambey field on the Yamal Peninsula, which supplies feedstock gas to the Yamal LNG plant in the port of Sabetta.

“We know now what reservoirs are available for carbon storage and where we can place injection wells,” Gyetvay said.

“We have also done the same thing throughout our whole portfolio [of legacy gas fields in West Siberia] to identify exactly where we can start injecting carbon," he added.

Regulatory and certification challenges

“We are going to work on the [Russian] regulatory process [this year] as there is no legal base in Russia to oversee carbon injection.

"With this in mind, Yamal LNG shareholders will be able to take a final investment decision on the CCS project by early 2022,” Gyetvay said.

Introducing a proper certification process for complying with reduced and zero carbon emissions during LNG production is another challenge, he acknowledged, but also crucial as Novatek will need to prove its compliance with emission standards to its international buyers, according to Gyetvay.

He said that Yamal LNG has already installed a vapour recovery system that captures boil-off gas during the LNG production process that is then re-used as a fuel for the plant, with a goal of reducing methane emissions.

Novatek last month announced a co-operation agreement with US player Baker Hughes to work on a pilot programme to introduce hydrogen into the gas liquefaction process to reduce carbon dioxide emissions from Yamal LNG facilities.

“We are working [on the project] as we speak”, Gyetvay said.