Neptune aims to keep ahead of curve on methane emissions

For many European oil and gas companies, addressing methane emissions has been at the top of their climate agenda this year.

The European Commission adopted its landmark methane strategy in October last year, aimed at reducing the release of the greenhouse gas into the atmosphere across all sectors. And it is currently working on a legislative proposal setting out standards for monitoring and reducing emissions in the energy industry, in order to give the strategy teeth.

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For Neptune Energy, which primarily operates in the UK, Norwegian and Dutch North Sea and onshore in Germany, part of the challenge is proving progress to stakeholders when the company already emits far less methane than many of its peers, Pete Jones, the company's vice president for operations in Europe, tells Gas Pathways.

Neptune benefits from having a fairly young portfolio, and it has also electrified some of its offshore facilities. Critically, its production is also weighted towards natural gas, accounting for three quarters of the total. As a result, it has a methane intensity of only 0.01%, versus an industry average of 0.23%, as well as a carbon intensity of only 6.3 kg/barrel of oil equivalent.

The commission's upcoming rules will be partly guided by standards set for accurately and transparently reporting oil and gas sector methane emissions under the Oil and Gas Methane Partnership (OGMP)'s 2.0 framework, launched last year. Led by the UN Environmental Programme and involving many of the world's leading oil and gas companies, OGMP is also targeting a 45% reduction in the industry's methane emissions by 2025, and a 60-75% cut by 2030.

Neptune was recently awarded Gold Standard status by OGMP for its plan to curb methane emissions further. This status is granted to companies with a clear and credible strategy for meeting the 45% reduction by 2025. Neptune's goal is an 85% cut, and it wants to reach net-zero methane emissions by the end of the decade.

"What is set to be proposed by the European Commission is effectively what we're doing right now," Jones says. "The challenge is to stay on top of the league - it will be about sustaining that quality of performance even as our infrastructure ages."

Neptune employs many of the standard leak detection and repair procedures used across the industry for keeping its emissions in check, including routine inspections by staff on the ground with infrared cameras and fixed detection systems. It combined this manual work with artificial intelligence, with the aim of taking corrective action on emissions, Jones says.

The company recognises the value of satellites for detecting and quantifying emissions, but they are unlikely to pick up the small, Tier 3 methane emissions that Neptune contends with.

"The satellite technologies are good if you're talking about looking at a site or a facility that has high emissions particularly for onshore sites," Jones explains. "But your individual offshore platform is unlikely to be producing the sort of emissions that would even show up. You'd have to have a pretty significant issue on your platform to get the level of data you'd need."

Neptune in March recently teamed up with the US Environmental Defence Fund (EDF) to test a new method for quantifying emissions at its Cygnus platform in the UK south North Sea, using drones and unmanned aircraft. The aim was to establish an accurate and scientific benchmark for measuring methane emissions offshore that can be applied to the industry at large.

CCS, hydrogen

Jones is in no doubt that demand for gas will remain robust as more renewables are deployed in Europe and elsewhere. The fact that the energy crisis unfolding in Europe coincided with the COP26 summit in Glasgow brought "some reality" to discussions about the energy transition, by demonstrating the need for reliable and affordable energy supply, he says.

The crisis was in part exacerbated in Europe by cuts to investments in indigenous gas supply in recent years, whether because of environmental concerns, the coronavirus pandemic or other factors. Jones believes that while renewable energy capacity should continue to expand, "in the interim you do have to support indigenous gas supplies, especially where they are the lowest carbon option."

Nevertheless, Neptune is making forays into the emerging markets for hydrogen and carbon capture and storage (CCS). 

The company is progressing a blue hydrogen and CCS project on the east coast of England, known as DelpHYnus, that will handle CO₂ from industry in the South Humber area while also delivering blue hydrogen as a low-carbon fuel for the region. DelpHYnus aims to produce some 1.8 GW of hydrogen at the former Theddlethorpe gas terminal, contributing 36% of the UK's target for 2030. The Cygnus field could be incorporated into the project as a CO₂ storage site, and Neptune has applied for an appropriate licence from UK authorities.

Unfortunately, DelpHYnus missed out on UK government funding during the first stage of a sequencing programme to decarbonise the country's largest industrial clusters. The two projects that were selected, the East Coast Cluster and Hynet, will gain access to a £1bn ($1.3bn) decarbonisation fund. But Jones notes that DelpHyNus can still go ahead, by applying for phase-two funding from the government and exploring other options as well.

The government also unveiled its long-awaited hydrogen strategy earlier this year, although the mechanism for supporting projects, such as a contract-for-difference scheme, has yet to be finalised.

Over in Dutch waters, Neptune wants to store up to 8mn metric tons/year of CO₂ at depleted gas reservoirs in the L10 area. Meanwhile, its Q13a platform in the Dutch North Sea is due to host a 1-MW pilot electrolyser that will use offshore wind power to produce green hydrogen, under the PosHydon project.

This article first appeared in Gas Pathways, a platform dedicated to technology and innovation in the natural gas industry. Click here for more information.