Gas flaring reduction:
contribution from carbon finance
Sectoral policies on GHG emission mitigation
Moscow Carbon Market Forum
April 28-29, 2008
Alexandrina Platonova-Oquab
The World Bank
New approaches in the gas flaring
reduction policy in Russia
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Russian government has been developing a set of
measures aimed at gas flaring reduction
Balanced combination of regulatory and economic
tools is key
Cumulative positive effect of gas flaring reduction
is significant both from the environmental (local
and global) and economic perspectives:
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One of the major sources of atmospheric pollution in
Russia*
currently, gas flaring in Russia is emitting at least
50 MtCO2e per year
*Source : Oil & Gas Journal Russia, March, 2008
Oil companies’ programs for gas flaring
reduction
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APG utilization programs are being
developed by oil companies:
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Several projects are considered under the
framework of the Joint Implementation
Implementation timeline realistically
requires several years to meet satisfactory
levels of APG utilization
Harnessing opportunities through
carbon finance
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Achieving higher satisfactory level of the
AG utilization will take time

Opting for the best available opportunities
is key
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Some projects will remain uneconomic
due to specific barriers
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Carbon finance could support the use of
most efficient alternatives that often
require significant additional investment…
and accelerate the achievement of
sectoral goals
Demonstrated impact of carbon finance
on gas utilization (CDM projects)
Al-Shaheen Gas-to-GPP (Qatar)
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APG utilized: 1500 Mln.m3/y
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CO2e reductions: 2.5 MtCO2/y
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Leveraged investment: USD 260Mln
Tambun Gas-to-LPG (Indonesia)
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APG utilized: 260 Mln.m3/y
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CO2e reductions: 0.4 MtCO2/y
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Leveraged investment: USD 30Mln
Kwale Gas-to-Power (Nigeria)

480 MW CCGT
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APG utilized: 600 Mln.m3/y
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CO2e reductions: 1.5 MtCO2/y
Total results for 10 years
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GHG emission reductions: 44 MtCO2e
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APG utilized: 23.6 Bln.m3
Expected benefits of carbon finance in
Russian context
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Incentivizing project developers to select the Best
Available Technologies
Contributing to the implementation of new
technological solutions:
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Gas conversion to products: GTL, methanol, DME

Gas to reinjection
Switching projects with marginal economics from
“-” to “+”
Boosting economics of gas utilization programs
grouping APG sources under unique umbrella
(scaling effect)
Potential role of JI gas flaring reduction
in the Russian climate change policy
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Project-based mechanisms have provided
tool to accurately evaluate baseline and
additionally of projects
Confidence in capabilities of Independent
Entities in assessing compliance with JI
requirements
Carbon finance has demonstrated
substantial leverage effect on investment
Carbon finance could strengthen the scope
of short and medium term gas utilization
activities in Russia
JI window may be closing: could Green
Investment Scheme complement JI?