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Climate Protection Initiatives

APG Utilization Program

The Company makes every effort to utilize associated petroleum gas. In 2020, we implemented a technology for deep APG injection at the Yarudeyskoye field. This allowed to cut our GHG emissions by 1.2 mmt of CO2 equivalent – a major environmental benefit achieved through re-injection of over 357 mmcm in the Yarudeyskoye field formations in 2020. As a result, NOVATEK’s APG utilization rate achieved 96.17% in 2020.

Carbon Capture, Utilization and Storage in LNG Production

NOVATEK is developing a concept for carbon dioxide capture, transportation and injection during LNG production. The Company contributes to the development of a licensing procedure for the underground storage of carbon dioxide and relevant amendments to the Law No. 2395-1 “On Subsoil” and the Federal Law No. 89-FZ “On Industrial and Consumer Waste” as well as applicable rules and regulations.

Hydrogen Production

In 2020, NOVATEK began organizational changes for hydrogen production, including creation of the Department for Alternative Energy & Offshore Technologies.

In 2020, we completed a conceptual evaluation of prospective projects for low-carbon (“blue”) hydrogen production from natural gas with carbon dioxide capture and utilization and the conversion of some of the existing gas turbines to a methane-hydrogen mix, as well as other projects for hydrogen production by electrolysis using renewable energy.

A conceptual evaluation of a prospective project for the large-scale production of low-carbon (“blue”) ammonia from natural gas with carbon dioxide capture and utilization is ongoing in 2021.

Also in 2021, NOVATEK will continue developing a medium- and long-term alternative energy strategy, with goals and objectives definition and project priority ranking and selection for implementation.

 

Use of Renewables

The Company uses environmentally friendly renewable energy sources: solar panels and wind turbines. The total number of such renewable energy systems in 2020 was 148, reducing indirect emissions in power generation. Renewable sources of energy are used to supply power to telemechanics units at trunk pipelines and well pads at gas condensate fields.

In 2021, we plan to launch a wind measurement program near the existing Yamal LNG plant on the Yamal Peninsula in preparation for a wind farm project that will use the generated electricity to reduce the carbon footprint of the LNG produced at Yamal LNG.

Cogeneration Technology at Gas Turbine Power Plants

Nearly all of the Group’s production facilities use the cogeneration (heat recovery) technology. Thermal efficiency is as high as 85–90%, reducing combustion product emissions, in particular GHG emissions. In 2020, GHG emissions were reduced by 101,656 tons of CO2 equivalent through cogeneration technologies.

Fueling Station Network Development and Transition to NGV Fuel

NOVATEK’s strategy as a natural gas and LNG producer calls for active development of the natural gas vehicle (NGV) fuel market natural both in Russia and abroad.

As part of NOVATEK’s long-term strategy, the Company plans to build a network of LNG fueling stations in Europe to provide freight transport with clean fuel at key transport connecting points between Germany and Poland. As at the end of January 2021, the Company owned a network of 9 LNG fueling stations as well as 21 regasification units on the European market.

In December 2020, Novatek Green Energy opened its first carbon-neutral LNG fueling station in Rostock, Germany. The carbon footprint of the LNG sold to consumers, including its final consumption, is compensated through carbon offsetting. The emission compensation projects were certified in accordance with the international VCS (Verified Carbon Standard).

On the domestic market, NOVATEK is implementing a project for the sale of LNG as a motor fuel. In August 2020, the first small-scale 40 mtpa LNG plant was launched in Magnitogorsk (Chelyabinsk Region).

 

LNG transportation by sea

The Arc7 ice-class LNG tankers can sail on the Northern Sea Route westward without any icebreaker support year-round and eastward with icebreakers assistance during months with difficult ice conditions. The carriers are powered by low-carbon gas generated by LNG cargo boil-off. The use of LNG carriers not only curbs greenhouse gas emissions, but also poses no risk of significant environmental disaster due to petroleum product spills.