Capterio’s Winter Newsletter: Flaring & Methane Opportunities At And Beyond COP28
Dear friend, partner, client, investor or supporter
The ongoing hostilities in Gaza, Israel and Ukraine have resulted in horrifying and unprecedented suffering for millions of people. Our thoughts are with them.
Beyond the human tragedy, these conflicts underscore the material risks in our global energy system, particularly if the crisis escalates within the region. The recent release of the IEA’s World Energy Outlook is a stark reminder of the world’s delicate predicament and the urgent need to enhance energy security, address energy affordability, and accelerate the energy transition.
Flaring And Methane Reduction: A Major Economic And Environmental Opportunity
Yet flaring and methane reduction is a quick win. Capturing flared, vented, and leaked gas not only has negative marginal abatement costs but also creates value, boosts national revenues, enhances energy security, supports jobs, improves respiratory health, and reduces emissions.
At Capterio, we collaborate with leading operators, financial institutions, service companies, traders and governments. Our work at Capterio focuses on two solutions – both already instrumental in reducing emissions. We would be delighted to work with you and your colleagues on either or both of these areas:
Solution 1: World-Class Analytics With FlareIntel Pro: Insights Delivering Impact
Our proprietary tool tracks flaring for every company in every country worldwide on a daily basis, and we have already helped our clients reduce emissions equivalent to 1.1 million cars. FlareIntel Pro uniquely (a) provides unrivalled visibility into flaring, (b) identifies operational improvements, and: (3) prioritises investment opportunities.
We have recently received a grant from the UK Space Agency to further develop Capterio’s award-winning technology and also offer consulting and advisory services around flare reduction and net zero roadmaps.
Our surprisingly influential insights paper with Columbia University: “North Africa can reduce Europe’s dependence on Russian gas by transporting wasted gas through existing infrastructure” demonstrates the power of credible data.
Solution 2: Project Development That Creates Value Whilst Materially Decarbonising
Our technical and commercial capabilities uniquely combine in our project development capabilities. We originate and advance projects (both technically and commercially) to make them fundable and deliverable. We’ve already built a portfolio with a potential of $500 million NPV, and the table below shows how attractive these investments can be.
To inspire attention, here are the numbers from one of our MENA project evaluations (this one was identified in 2018 … imagine if it wasn’t flaring today!) Many similar projects are currently available – our industry needs to take action!
- Flare rate: 40 million scf/day
- Revenue: $120 million per year
- CAPEX: $50 million
- IRR: >35%; Payback: <2 years (post-tax)
- Emissions reduction: 2.68 million CO2e tonnes per year (0.77 million CO2 tonnes + 1.91 million CO2e tonnes of methane)
We would be delighted to work with you and your partners to creatively unlock flare-capture projects with material potential for impact.
Capterio’s Wider Contribution
We are optimistic that COP28 – in less than 30 days – will catalyse and accelerate action. His Excellency Al Jaber will engage the widest possible range of oil and gas producers in making substantial commitments to flaring and methane reduction through the Global Decarbonisation Alliance.
But we need more than mere ambitions. That’s why I’m delighted to have collaborated with the Atlantic Council on a data-driven and action-oriented paper titled “Why COP28 is Right to Prioritize Global Methane and Flaring Reduction“, which makes three specific recommendations around engagement, project origination and maturation, and financing.
And we are starting to see real traction. I was delighted to be invited by Sonatrach’s CEO to give a public keynote showcasing how flare monetisation improves energy security and supports exports. We recently chaired a decarbonisation event with His Excellency Minister El Molla from Egypt, showcasing our recent successes and presented to OPEC’s HQ in Vienna.
Recent successes prove that our model works (see our paper on Egypt’s flaring leadership ahead of COP27 and showcasing recently delivered projects in Egypt, Iraq, the US and others). Equally, the horrifying events in Gaza and Israel reiterate the importance of eliminating waste while improving regional security (see our piece “War and Waste: How the Israel-Hamas Situation Highlights Wasted Gas Issues in Egypt and Beyond“).
Beyond this, our work is regularly highlighted in the media (live on BBC TV and radio, on the front page of the Washington Post, New York Times and in the FT and more). You can find out more by joining us live on X/Twitter this Friday.
We also hope to see many of you at COP28. Until then, to find out how you can work with Capterio to reduce flaring, create value and accelerate the energy transition, please get in touch with us at email@example.com or visit www.capterio.com.
In case a refresher is helpful, consider the numbers. The upstream oil and gas industry loses 255 billion cubic meters (BCM) of gas due to flaring, venting, and leaking. That’s 6.3% of produced gas, 1.6 times Europe’s imports from Russia in 2021 and a loss of up to $69 billion in revenues for producing countries.
Flaring, venting, and leaking also result in 2.6 billion CO2-equivalent tonnes of emissions (arguably 6.7 billion CO2e when methane emissions are considered over a more relevant 20-year period). This is more than double the emissions from aviation and equivalent to twice the energy-related emissions from Africa. No wonder that flaring has been likened to “throwing gold coins into a raging fire“.
The chart below shows the relative intensity of upstream emissions (from flaring, venting and leaking) of oil and gas production by country, split by those in OPEC+ and those not: