The Ministry of Economic Development of the Russian Federation has passed an order approving two of Rosneft’s APG joint implementation investment projects. The order, No. 112 of 12 March 2012, approves a project to reduce APG flaring and generate electricity at the Khasyreiskoye deposit and a project to utilise APG at Rosneft’s Priobskoye deposit. The projects for APG utilisation at the Khasyreiskoye and Priobskoye deposits were developed in line with Article 6 of the Kyoto Protocol to the United Nations Framework Convention on Climate Change.
The Ministry’s decision means Rosneft can begin selling emission reduction units (ERU) acquired through its associated petroleum gas (APG) utilisation programme at deposits in Western Siberia to Carbon Trade & Finance SICAR S.A., an investment company. The APG utilisation programme at the Khasyreiskoye and Priobskoye deposits is an integral part of Rosneft’s gas programme that aims to achieve 95% APG utilisation. These projects mean this goal could be achieved in 2012.
Rosneft has already worked successfully on joint implementation projects at the Komsomolskoye deposit in the Yamalo-Nenets autonomous region and the Kharampurskoye field in Western Siberia. In 2009 Rosneft became the first large Russian company to secure investment in joint implementation projects, thus making use of article 6 of the Kyoto Protocol, which states companies are permitted to derive revenue from their emissions quotas.
Rosneft President Eduard Khudainatov said: “Selling ERUs will provide a significant boost to the economic efficiency of our APG utilisation programme. Our partnership with Carbon Trade & Finance serves as a strong example of mutually beneficial international environmental partnership. These projects have already generated over 20 million euros for Rosneft, which, in line with the Kyoto Protocol, will be channelled towards reducing greenhouse gas emissions.”
Notes for editors
Carbon Trade & Finance SICAR S.A. is a joint venture between Gazprombank and Commerzbank that invests in joint implementation projects. It was registered in Luxembourg in 2006 with support from the European Commission.
Under the terms of joint implementation projects, foreign investors provide energy saving technologies to Russian enterprises in exchange for CO2 emissions quotas saved during project implementation.
The Kyoto Protocol is an international agreement adopted in Kyoto (Japan) in 1997 and linked to the United Nations Framework Convention on Climate Change.
Article 6 of the Kyoto Protocol envisages the option of quota trading, through which countries or individual economic entities within these countries can buy or sell emission reduction unit (ERU) quotas on the national, regional or international markets.