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    Neptune aims to set bar for emissions monitoring: interview


The European operator is working to maintain its already very low emissions intensity for years to come, while developing opportunities in hydrogen and CCS.

by: Joseph Murphy

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Neptune aims to set bar for emissions monitoring: interview

Privately owned producer Neptune Energy is looking to create a "gold standard" for emissions monitoring that could one day serve as a guide for the industry at large, the company tells NGW

Neptune, which operates in Europe, North Africa and the Asia-Pacific region, teamed up with the US Environmental Defense Fund (EDF) last month to test a new approach for measuring methane emissions from offshore facilities. EDF will co-ordinate a team of international researchers including Scientific Aviation, which provides airborne emissions sensing, and Texo DSI, a UK-based drone platform provider, to evaluate advanced methods for quantifying facility-level offshore emissions.

Drones, aircraft and methane-sensing technologies will be deployed at the Neptune-operated Cygnus platform in the UK southern North Sea, to assess the impact of typical operations like gas separation, drying and compression technology, and flaring and venting.

"Measuring what goes in and what goes out has historically been the simplest way of measuring methane losses in a system," David Hemmings, Neptune's vice president for business development and commercial, tells NGW. "But we are working with different technology partners to look at ways to monitor where those emissions are being made."

The EU passed its methane strategy last year, and the hope is that it will encourage European oil and gas companies to invest in satellites and other technologies to improve leak detection. But the European Commission has faced calls from activist investors and NGOs to introduce mandatory methane emissions standards for the gas industry, to give the strategy teeth.

Neptune hopes that with EDF it can develop a "gold standard" for monitoring emissions at Cygnus that can be applied at its other offshore facilities and, potentially, the industry at large.

The company's own methane emissions are comparatively very low, because its portfolio is very young. It boasts a methane intensity of only 0.01%, compared with an industry average of 0.23%, and is targeting net zero methane emissions by 2030.

"Reducing methane emissions to net zero is an operational target not a new energy target," Hemmings says. "We just see it as good and responsible operations."


Climate credentials

Oil and gas producers particularly in Europe are under increasing pressure from investors and customers to improve their environmental credentials. Particular scrutiny is paid to their environmental, social and governance (ESG) score. In its latest ESG ratings review in April, Sustainalytics gave Neptune a score of 26.1, placing it in the top 3% of all upstream companies with a global ranking of fifth out of 169.

Neptune also has a low carbon intensity of only 6 kg/barrel of oil equivalent, compared with a North Sea average of 21 kg/boe. Its young portfolio is weighted towards gas, particularly in the Netherlands, and it has electrified some of its offshore facilities.

Instead of targeting a further reduction, Neptune aims to maintain its current carbon intensity over the next decade. 

"One of the challenges we have is that investors continually ask, how are you going to improve, and when you start from a quite low base of emissions it's much harder to do that," Hemmings says. "We have a target of maintaining them at that level. We have a relatively young portfolio, but as it gets older it will need more compression, more energy. The carbon intensity would increase to 14 kg/boe by the end of the decade if we were to do nothing at all."

Neptune plans to continue with electrification of platforms, but this is not always the best option. The non-electrified Cygnus platform, which is just coming off plateau, boasts a carbon intensity of less than 2 kg/boe. Exhaust gases from the platform's turbines are recycled to provide heat to the processing trains, Hemmings explains, and so energy requirements would increase if it was electrified. "Electrifying a very efficient platform with a finite life may not be the right thing to do," he says.

Neptune is also making strides in hydrogen and carbon, capture and storage (CCS), mainly in the Netherlands. The company's PosHYdon pilot project aims to produce green hydrogen from water at its Q13a platform, with the process powered by offshore wind energy. Its hope is to get in on the ground floor of a potential green hydrogen economy in the Netherlands.

The company sees both blue and green hydrogen serving as part of the energy mix, however. "Longer term, the objective everyone has is green hydrogen, but blue hydrogen is an important intermediary step," Hemmings say. "The scale of the challenge means there will have to be stages of evolution."

Neptune unveiled plans for a CCS scheme off the Dutch coast in December. The project will store 5-8mn mt/year of CO2 from Dutch industry at depleted reservoirs at the Neptune-operated L10-A, L10-B and L10-E areas, which would make it among the largest CCS undertakings in the Netherlands. Pre-front-end engineering and design work on the scheme is expected to be ready by the middle of the year, Hemmings says. 

Neptune can operate offshore CO2 storage safely and economically, he says, having undertaken CO2 injection for over a decade at its now-depleted K 12 Bravo asset. The company is also a partner in the Equinor-operated Snohvit field in the Barents Sea, where CO2 is likewise separated from gas and re-injected into the field's reservoirs.

The greater technical challenge is capturing the CO2, however, Hemmings says. Another challenge is understanding the regulatory and fiscal frameworks affecting CCS, as well as the liability management.

"It is very difficult for a private enterprise to retain liability for CO2 storage in perpetuity, which is effectively what you're doing," Hemmings says. "So there is a role there for governments to play in that long-term liability management."

CO2 taxation is expected to serve a major role in spurring CCS development. Norway is looking to steadily increase CO2 emissions taxation over the next decade to support the Northern Lights project and other initiatives. The Netherlands also has a carbon tax, and there is also the EU emissions trading system.

"The certainty of knowing where governments are going is key in order to make the case for investment," Hemmings says of CO2 taxation, pointing to policy uncertainty in the UK.

With both hydrogen and CCS, the priority should be making use of existing infrastructure, left over from the oil and gas industry. "Building everything from new creates emissions in their own right," Hemmings says. "You can repurpose what we've already put in the North Sea, which effectively have sunk emissions already."