Pavilion Energy calls for offers to pave way for greener LNG supply

Temasek unit also seeks joint efforts on methodology and plans to cut emissions

Pavilion Energy, a unit of Temasek Holdings, is calling for offers to jointly develop a quantification and reporting methodology which could see carbon-neutral deliveries of liquefied natural gas (LNG) and pave the way for more environmentally sustainable natural gas strategies.

On Tuesday, the company launched a request for the proposal, which comprises three components: supply of up to two million tonnes of LNG a year for Singapore, ideas for the reduction of greenhouse gas emissions, and collaboration on the methodology.

It expects bidders to put in significant resources for completion of the methodology and plans for greenhouse gas emission reductions next year, with the LNG supply to commence in 2023.

Pavilion Energy, which supplies one-third of Singapore's downstream natural gas demand, said the methodology should cover emissions from the well-to-discharge terminal supply chain, and include LNG transportation.

Its group chief executive Frederic Barnaud said industries and individuals have become more sustainability-conscious, and the company is "taking a proactive stance" towards integrating carbon-neutral LNG into its portfolio, a move which it envisions will become normal practice across the industry.

Natural gas, the cleanest form of fossil fuel, is expected to continue being Singapore's dominant fuel source in near future. More than 95 per cent of the Republic's energy needs comes from natural gas.

Mr Barnaud noted that while there are currently ways that greenhouse gas emissions have been calculated for single LNG cargo transactions, there is no standardised and verifiable methodology for quantifying and reporting emission levels.

"We expect this methodology to become standardised and certified as a common industry framework, paving the way towards more environmentally responsible and sustainable natural gas strategies," he added.

"The idea is that the statement of greenhouse gas emissions will eventually be issued on a per cargo basis via electronic means designed to align with existing cargo delivery documentation," Mr Barnaud said of the intended end result of this call for offers.

The company is in talks with several organisations that share its ambitions for carbon-neutrality in the supply, trade and use of energy, he said.

"We see the need to build partnerships around standardisation, certification and price transparency for greenhouse gas emissions reduction or offset certificates in Asia - and eventually to develop a marketplace and trading hub," he added.

The next steps are to get stakeholders such as LNG terminal operator SLNG Corporation, generation companies, government agency Enterprise Singapore as well as shipping and commercial partners, to take this dialogue further, Mr Barnaud said.

A version of this article appeared in the print edition of The Straits Times on April 03, 2020, with the headline 'Pavilion Energy calls for offers to pave way for greener LNG supply'. Print Edition | Subscribe