CNOOC Gas & Power Group Co. (CNOOC), a wholly owned subsidiary of China National Offshore Oil Corporation, has signed an agreement with Shell for delivery of two cargos of the first carbon neutral LNG to the Chinese mainland.
The cargoes will provide enough carbon neutral energy to power nearly 300,000 homes for a full year.
These cargoes are “carbon neutral” which means that all emissions from exploring for and producing the natural gas, to the use by the final consumers are offset by credits from a variety of nature-based projects including Shell supported afforestation projects from Qinghai and Xinjiang provinces in China. CNOOC also plans to auction these two carbon neutral LNG cargoes through the Shanghai Petroleum and Gas Exchange, offering many downstream gas buyers a choice to decarbonise their energy use.
Commenting on the agreement, Steve Hill, EVP Shell Energy stated “We are very excited and humbled to be working alongside our trusted partner CNOOC in bringing the first carbon neutral LNG cargoes to Chinese Mainland. We are particularly pleased to be able to also use credits from projects in China for China. Using nature-based credits in conjunction with LNG is a unique solution to support the needs of Chinese gas customers looking to decarbonise their energy use.”
Ye Guobiao, chairman of Shanghai Petroleum & Gas Exchange stated, “The auction of carbon neutral LNG through a trading platform is an innovation worldwide. SHPGX will supervise transaction organization, performance guarantee, and settlement arrangements, so that the domestic users can fully, efficiently, quickly and safely participate in the purchase of "net zero carbon" natural gas resources”.
Wu Wenlai, chairman of CNOOC Gas & Power said, “As the largest LNG importer in China, CNOOC aims to provide reliable, sustainable, safe, green and low-carbon energy product. We are very delighted to work with our trusted partner Shell for delivering the first carbon neutral LNG in Chinese Mainland through this innovative solution. Credits used to offset emissions for this LNG are also from local projects and besides combating climate change, will help guard our clear waters and green mountains and eliminate poverty.”