Petroleum company PetroChina International Co. Ltd. received its first carbon-neutral LNG cargo at Dalian port of China, after signing the industry’s first term contract for carbon-neutral LNG supply with oil major Shell.
The move was part of a five-year agreement between Shell Eastern Trading Pte Limited (Shell) with PetroChina International Co. Ltd. (PCI) for the supply of carbon-neutral LNG. For each cargo delivered under this agreement, PCI and Shell will cooperate to offset life-cycle carbon dioxide equivalent (CO2e) emissions generated across the LNG value chain, using high-quality carbon credits from nature-based projects.
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As informed, the carbon credits used to offset life-cycle CO2e emissions generated from the cargo delivered today, come from Shell’s global portfolio of emission reduction projects, that protect forests in China and other parts of the world. Nature-based projects protect, transform or restore land and enable nature to add oxygen and absorb more CO2 emissions from the atmosphere. Each carbon credit is subject to a third-party verification process and represents the avoidance or removal of 1 tonne of CO2e.
Since delivering the world’s first carbon-neutral LNG cargoes in 2019, we have collaborated with producers and buyers across the globe for 13 other carbon-neutral LNG cargoes. This first term deal is an important step in scaling up the market for carbon-neutral LNG and we are very grateful to our valued partner PetroChina for their collaboration in enabling this industry milestone,
…said Steve Hill, Executive Vice President, Shell Energy.
PCI is a wholly-owned subsidiary of PetroChina, the largest oil and gas producer and distributor in China and this deal will enable it to provide carbon-neutral gas to Chinese businesses in line with China’s 2060 carbon-neutrality ambitions.
Economic growth and supportive coal-to-gas switching policies have led China to become the world’s second largest LNG importer. In 2020, Chinese LNG imports reached 67 million tonnes and are expected to nearly double by 2040.
