Australian major Woodside and its Pluto LNG JV partners have delivered their first cargo of carbon offset condensate to independent commodity trading company Trafigura.
The cargo was loaded at Pluto LNG in Western Australia, Woodside said on Monday.
The carbon dioxide equivalent emissions associated with extraction, storage and shipping of the 650,000-barrel cargo will be offset through a combination of efficiency measures, which reduce emissions, and surrender of high-quality carbon offsets, the statement reads.
Trafigura is working with the vessel owner to minimise actual emissions associated with transporting the cargo.
High-quality carbon offsets have been sourced from nature-based projects located in the Asia-Pacific region independently validated and verified by the Gold Standard or Verified Carbon Standard.
Carbon dioxide equivalent emissions generated by extraction, storage and shipping of the cargo will be calculated jointly by Woodside and Trafigura. Calculation of emissions associated with extraction and storage will be based on data gathered by Woodside, as operator of Pluto LNG.
Calculation of carbon emissions associated with shipping will be base on data collated by Trafigura, specific to the cargo voyage.
Woodside vice president Marketing Trading & Shipping Mark Abbotsford said this could be the first carbon offset condensate cargo traded globally, demonstrating opportunities for carbon offset condensate.
“We are pleased to be partnering with Trafigura, Kansai Electric, and Tokyo Gas to deliver our first carbon offset condensate cargo. The transaction provided an opportunity to further develop our carbon offset marketing capability and gain an understanding of the carbon market in its early phases,” he said.
In addition to the transaction, Woodside and Trafigura have signed a non-binding memorandum of understanding (MOU) to explore opportunities for carbon management in the marketing of carbon offset condensate, crude oil and liquefied petroleum gas in the future.
“The MOU is consistent with Woodside’s and Trafigura’s respective objectives to explore a market for carbon offset products over the long term and reduce emissions intensity across the value chain,” Abbotsford said.