UN approves Mexican gas-flaring reduction project

A joint effort of Petroleos Mexicanos and Statoil marks the first Mexican gas-flaring reduction project to be registered by the United Nations.

Paula Dittrick
OGJ Senior Staff Writer

HOUSTON, Oct. 26 -- A joint effort of Petroleos Mexicanos and Statoil marks the first Mexican gas-flaring reduction project to be registered by the United Nations.

The collaboration involves associated gas production from Tres Hermanos field in Veracruz. Pemex plans to build a gas processing and treatment plant to eliminate an estimated average 83,000 tonnes/year of carbon dioxide emissions during a 10-year period.

Statoil and Pemex registered the Tres Hermanos flaring-reduction project under the UN’s Clean Development Mechanism (CDM).

Companies can acquire approved emission-reduction credits created under the Kyoto Protocol via the CDM project-based system. CDM enables certified emissions reductions (CERs) to be earned and traded.

Statoil prepared the CDM registration documentation. CDM projects must follow specific and stringent UN rules. Statoil also will ensure the project approves yearly verifications.

Pemex plans to finance, own, and operate the gas plant. In return for providing its technical expertise, Statoil will buy CERs from Pemex.

Since 2004, Pemex and Statoil worked to identify CDM projects. Pemex committed to voluntarily reduce carbon emissions and improve energy efficiency.

Plans also call for pipelines to bring the gas to market. For the gas treatment plant, Pemex plans to sign an engineering, procurement, and construction contract in January 2011.

Under the Kyoto Protocol, Norway was among countries that accepted obligations to achieve specific GHG reductions within a specific period.

The CDM program outlines benefits for investment in emission-reduction projects in nations without such commitments, such as Mexico, and outlines ways to earn CERs.

Under CDM rules, every tonne of CO2 avoided results in one CER issued by the UN.

Pemex and Statoil both belong to the World Bank’s Global Gas-Flaring Reduction Partnership, a public-private partnership launched in 2002. The country of Mexico also belongs to GGFR, which supports the efforts of oil-producing countries and companies to increase the use of associated gas and reduce flaring.

Contact Paula Dittrick at paulad@ogjonline.com.

More in HSE