Russia’s gas giant Gazprom has admitted to several large methane leaks this year, the company said over the weekend. Methane is one of the most environmentally harmful gases.
Gazprom has taken responsibility for the leaks from its pipelines that include one of 2.7mn cubic metres on
Gazprom said the gas was released after it detected a problem with its Urengoy-Centre 1 pipeline in
The company also admitted to several smaller leaks around planned pipeline maintenance. The climate warming effect of methane is judged to be 86-times more powerful than carbon dioxide.
The satellite detected another giant methane plume on
The leaks were detected by a new international satellite capable of detecting emissions from individual sites. The same satellite uncovered similarly large methane leaks earlier this year from gas pipelines in
A satellite reportedly looked down on central
That amount of methane would have a planet-warming impact equivalent to driving 250,000 cars around in circles for a similar amount of time.
Gazprom, along with most of Russia’s blue chip companies, has been striving to improve its environmental, social and governance (ESG) scores; however, analysts say while the leaks are a smudge on its reputation the leak is unlikely to cause much damage to its business or stock price, even though the company will incur a fine in line with Russia’s environmental regulations.
“While gas companies generally score better on environmental issues than do oil companies, they are still closely watched by activists as producers of hydrocarbons,” analysts with BCS GM said in a note. “The issue here for Gazprom is twofold. First, methane is a very powerful – if relatively short-lived – greenhouse gas. Second, ESG (environmental, social and governance) issues have become a key investment screen for institutional investors, especially for funds based in
Under Russian regulations, methane is a pollutant; hence its release into the atmosphere is regulated. Every gas transportation asset has a permitted amount of methane that it is allowed to emit in the normal course of its business. Emitting more methane than permitted leads to a fine of
In its Ecological Report for 2019, the company disclosed releasing 1,401kt of methane and other hydrocarbon-pollutants into the air (excluding
“Given the company’s statement that this methane release happened in the normal course of its business, which is somewhat confirmed by the numbers stated above, we do not expect any substantial financial or operational consequences. However, we think that the situation might be quite negative for sentiment on Gazprom’s shares,” VTBC said.
The leak comes on the back of a string of environmental disasters in the last two years.
A power unit belonging to
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