Gazprom Neft has completed two transactions to sell emission reduction units (ERUs) it received under the Kyoto Protocol. The company has disposed of 3.93 million ERUs (each unit is equivalent to one tonne of CO2); which is more than 13 times greater than the volume put up for sale in May 2011, when Gazprom Neft reached the first such agreement.
The ERUs were received for completing joint ventures (JVs) at four of the company’s sites: Ety-Purovskoe, Yaraynerskoe, Sugmutskoe and Romanovskoe (the latter two combined into a single project), which are operated by Gazpromneft-Noyabrskneftegaz and a subsidiary of Muravlenkovskneft.
“We aim to minimise our environmental impact, so we are increasing our utilisation of associated petroleum gas or APG which reduces hydrocarbon emissions into the atmosphere. In 2011, Gazprom Neft expanded the number of Kyoto Protocol projects from one to three, allowing us to significantly improve their economic indicators for sellable ERUs and make up for some of the cost of putting in the infrastructure to utilise associated gas,” said the Chairman of Gazprom Neft Management Board Alexander Dyukov.
The Kyoto Protocol is an international document adopted in Kyoto, Japan in 1997 to complement the UN Framework Convention on Climate Change (UNFCCC). It requires industrialized countries to stabilise or reduce their emissions of greenhouse gases by 2008-12 compared to the 1990 baseline. The protocol allows for trading in quotas – states and companies can buy and sell greenhouse gas emission quotas on national, regional and international markets.
The JV at Ety-Purovskoe involved building a pipeline more than 70km long. This allows the APG produced at the field to be sent to the Vyngayakhinskoe compressor station so it can then be used at Sibur’s Vyngapurovskoe gas condensate processing plant. Gazprom Neft’s partners in the JV are Mitsubishi Corporation and JX Nippon Oil and Energy. The first sale of quotas from the Ety-Purovskoe site took place in May 2011, the second in early 2012. The latest transaction in summer 2012 disposed of ERUs granted for 2011 and Q1 2012.
The project at Yaraynerskoe involved laying a 55km pipeline to the Vyngapurovskoe gas condensate processing plant. To raise the level of utilisation at Sugmutskoe and Romanovskoe, a 70km pipeline was built to the Muravlenkovsk gas condensate processing plant, along with an 8.5km gas pipeline. Gazprom Neft’s foreign partner in the JV for these three sites is Vitol. The latest transaction sold ERUs received for these sites for 2008-10.