Converting upstream oil and gas production facilities to run on electricity powered by renewables or natural gas that would otherwise be flared could cut more than 80% of associated emissions, according to new research from Rystad Energy.
Fully electrified rigs and other assets on the Norwegian Continental Shelf emit 1.2 kilogrammes of carbon dioxide per barrel of oil equivalent (kg of CO2 per boe) produced, an 86% drop from the 8.4 kg of CO2 per boe emitted by the same assets before electrification.
Norway is in a prime position among major oil and gas producers in that it can tap into its abundant renewable energy resources, particularly hydroelectric power, to significantly reduce greenhouse gas emissions from upstream production.
The country was an early mover in refitting its assets to run on clean power, and now has plans to cut emissions from the continental shelf by 70% by 2040; however the Nordic country remains western Europe’s biggest petroleum producer.
The report notes that even a partial electrification will significantly cut emissions.
Premium energy basins (PEB) – a term coined to describe oil and gas basins with ample hydrocarbon reserves and the potential to incorporate environmentally friendly practices – could hold the key.
“We have identified 30 such basins worldwide, which collectively contribute more than 80% of the world’s oil and gas this year and will continue to do so until 2050,” the report states.
“If PEB assets electrify and reduce emissions by 50%, a total of 5.5 gigatonnes of carbon dioxide (Gt of CO2) would be avoided by 2050. Based on the accepted industry standard calculation, this CO2 reduction would equate to about 0.025 degrees Celsius of global warming avoided during the same period.”
The Middle Eastern Rub al Khali (370 million tonnes of CO2e) and Central Arabian (251 million tonnes of CO2e) lead the charts.
Palzor Shenga, Vice-President, Upstream Research, said, “As the world confronts the pressing issue of climate change, the oil and gas industry is under increasing pressure to minimise its carbon footprint and align its practices with global sustainability objectives. Where it’s possible and economically viable, electrification has great potential to lower the industry’s emissions while maintaining production output.”
About 140 billion cubic metres per annum of gas has been flared globally in the last 10 years, totalling about 290 million tonnes of CO2e emissions annually.
These volumes are primarily driven by major producers in North America, the Middle East and Africa. Flaring avoidance can be an effective way of reducing upstream emissions for both electrified assets and assets with limited electrification potential.
In a webinar, CEO Jarand Rystad said the world is in the midst of a rapid transition, with fossil fuel generation dropping from 34% in 2019 to 22% today.
Christoph Halser, Analyst, Gas and LNG market, said European gas capacity is forecast to rise 17.5% to 2038 as the renewable roll-out unfolds.
Global LNG exports see ‘strong recovery’
Global LNG exports increased from 33.30 Mt in July to 35.76 Mt in August, returning production figures above the 2024 average of 34.84 Mt, according to Rystad.
Of note is Altamira LNG which exported a partial cargo in mid-August as part of its commissioning, marking Mexico’s first export from the facility.
The US, Russia, Australia, Malaysia and Qatar all contributed to the recovery in exports during August. By contrast, Indonesia, Brunei and Mozambique saw a marginal decrease in their LNG exports.
Qatar’s increased from 6.93 Mt in July to 7.21 Mt in August. The Gulf nation’s exports averaged around 6.61 Mt per month in 2023. Malaysia’s exports increased from 2.05 Mt in July to
2.37 Mt in August, despite issues with heat exchanges in MLNG’s trains 7 and 8 that emerged in early August, and ongoing upstream pipeline issues at the end of the month. Malaysia’s exports averaged about 2.23 Mt per month in 2023.
Spain ‘on track’ to hit 2030 green hydrogen target
In a separate report this week, Rystad Energy notes Spain could significantly boost green hydrogen production by 2030, with most projects considered low-risk and on track for timely commissioning, thanks to strong government support.
Spain is an established green energy leader in Europe, with its significant wind and solar generation capacity giving renewable power generation over a 50% share of the nation’s total electricity mix.
The next phase of its decarbonisation strategy will be harnessing its renewable potential for hydrogen.
The global energy intelligence company notes that Spain can achieve approximately 5 GW of installed electrolyser capacity by 2030. However, to meet its target of 11 GW, the highest in the European Union (EU), the country will need additional support from its subsidy programs. Germany follows closely in second place with a target of 10 GW by 2030, but is currently projected to reach 4.5 GW.
