SOCAR Trading pushes into LNG-to-power, to open carbon division

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Azerbaijan’s SOCAR Trading has set up a team to develop integrated LNG-to-power projects and aims to establish a carbon division this year, executives at the firm said, Trend reports citing Reuters.

Owing to their complexity, LNG-to-power projects are usually carried out by a consortium of companies and SOCAR hopes to establish itself as a major player in the sector.

It has already been involved in one project in Malta as part of the ElectroGas Malta consortium that built an onshore regasification facility to receive liquefied natural gas (LNG) along with a power plant, completed in 2017. SOCAR Trading took an equity stake and provided the LNG for the project.

“Ever since our first LNG to power project in 2017, we had the idea of replicating the LNG-to-Power concept elsewhere,” Togrul Kocharli, chief development officer at SOCAR Trading, said.

“We now have set up a dedicated team.”

The Geneva-based firm, part of Azerbaijan’s state oil company SOCAR, says its next LNG-to-power project will be in Sri Lanka where it is part of the Pearl Energy project to develop LNG capabilities at the country’s Hambantota port. The LNG would then be transported by road to power producers with an eventual goal to build a power plant at the port.

The firm is also eying opportunities in several African countries including Senegal and Mozambique, Kocharli said, and would participate in an upcoming tender to set up LNG capabilities at the Coega special economic zone in South Africa.

Another similar project lined up in Ivory Coast was on hold due to a period of political uncertainty after the death of two government heads.

SOCAR traded 4 million tonnes of LNG last year and hopes to reach 10 million tonnes by 2025.

Interest in carbon offsets and trading has jumped over the last year on the back of heavy pressure from shareholders and lenders on companies to cut emissions.

EU carbon credit prices have surged 20% since December and continue to rise, while the Chicago Mercantile Exchange set up a voluntary carbon offset futures contract, which started trading on March 1.

SOCAR plans to join the fray with a new carbon division including trading and business development.

“By the year-end we hope to have everyone recruited and working,” Hayal Ahmadzada, head of trading at SOCAR, said.