Mexico was set to receive its first cargo of carbon offset liquefied natural gas on Friday (July 16), according to a Thursday announcement by BP plc and Sempra. 

Sempra

Subsidiaries of the firms inked a contract for delivery of the cargo to Sempra’s Energía Costa Azul (ECA) terminal on Mexico’s Pacific Coast.

Greenhouse gas (GHG) emissions from the cargo will be offset by BP Gas Marketing Ltd. retiring carbon credits sourced from its carbon trading portfolio on behalf of Sempra LNG, BP said. 

Carbon dioxide and methane emissions associated with the cargo from the wellhead to the discharge terminal, aka well-to-tank, will be estimated using BP’s GHG quantification methodology for LNG, the supermajor said. 

“These estimated emissions will be offset by retiring a corresponding amount of carbon credits, sourced from a Mexican afforestation project from BP’s vetted portfolio of offsets on behalf of Sempra LNG,” BP said.

Citing projected growth in global demand for LNG and natural gas, Sempra said its subsidiaries Sempra LNG and Infraestructura Energética Nova (IEnova) “each intend to continue supporting this growth by diversifying their offerings, including developing bundled carbon offset LNG products to help meet customers’  demand.”

Sempra LNG’s Justin Bird, CEO, said, “We are excited to advance our goal to lower GHG emission intensity at our LNG facilities.

“Sempra LNG continues to build a strong business portfolio focused on sustainability and the global energy transition.”

BP’s Carol Howle, executive vice president of trading and shipping, said, “This new offer further demonstrates our determination to remain one of the world’s leading and most innovative LNG suppliers. 

“The development and continuous improvement of a clear and reliable methodology for quantifying the carbon intensity of our LNG supply chain is an important step in helping our customers deliver their sustainability goals and supports our ambition to help the world get to net zero.”

BP’s methodology was developed following relevant international standards and may be updated periodically, the company said. 

The carbon-neutral LNG market is on track to quadruple this year according to recent analysis by FTI Consulting.

However, standards and methodology for defining carbon neutrality vary dramatically, researchers said. 

BP is aiming to invest $5 billion annually in renewable and low-carbon energy by 2030, up from $500 million currently, and is targeting net zero carbon emissions by 2050.

BP “does not intend to rely on carbon credits to meet its 2030 aims,” the company said.

Sempra LNG and IEnova reached a final investment decision in late 2020 on the 3.25 million metric ton/year (mmty) ECA LNG Phase 1 liquefaction project adjacent to the existing regasification terminal.

A proposed second phase would add 12 mmty of liquefaction capacity.

Sempra also is eyeing a separate LNG export project called Vista Pacifico with capacity of 3-4 mmty at the port of Topolobampo in Sinaloa state.

Natural gas imports to Mexico from the United States are expected to grow by about 10% over the 2020-2024 period, according to a forecast this month by the International Energy Agency.

However, pipeline imports are displacing LNG as new infrastructure comes online.

Mexico’s LNG imports fell by 62% year/year in 2020 to 2.5 Bcm, according to BP plc’s Statistical Review of Energy 2021. Mexico’s gas consumption, however, only dipped by 1.9%.