ONGC set to make money from carbon credit trade
06 Apr 2010
State-owned explorer Oil and Natural Gas Corporation (ONGC) on Monday said it has received 10,722 emission reduction certificates from the United Nations for a waste heat recovery project at its Mumbai High fields, making it the first public sector undertaking to generate revenue by trading in carbon credits.
The heat recovery project is the first of the six that ONGC has registered with the clean development mechanism (CDM) of the United Nations framework convention on climate change, the company said in a statement from New Delhi.
Under the CDM process, there are two important milestones - registration and issuance. Registration qualifies a CDM project to earn certified emission Reduction (CER) credits and become a contender for carbon trading. 'Issuance' is the ultimate step when the CERs are physically issued to an entity to trade. Once a project is registered, it is subjected to continuous monitoring and periodic verification for the entire crediting period.
"The waste heat recovery project at Mumbai High recovers heat from the exhaust flue gases of two processed gas compressors," the statement said. The PGC is used for compressing the associated gas in crude oil production activities, installed at ONGC's offshore Mumbai South platform (MSP).
The MSP is the first ONGC platform having processed gas compressor and waste heat recovery unit. ONGC has installed waste heat recovery units at each of the PGC exhaust points, in which waste heat is used to heat process oil, which is further used to heat various process streams in the crude oil production activities.
"The project activity has also reduced the consumption of natural gas, which is otherwise used for heating of process oil for crude oil production activities," the statement said.
Carbon trading is one of the fastest growing financial markets in the world. India offers a large potential for CDM because of its inherent dependence on fossil fuels for development. So countries with relatively low abatement and transaction costs like India are a major attraction for CDM projects. Estimates valued the global carbon trade at $64 billion in 2007.