Reducing methane emissions Davide Scrocchi Technical Department INTERNATIONAL

Reducing methane emissions Davide Scrocchi, Technical Department INTERNATIONAL GAS UNION IGU TRACOM MEETINGS ITALY / MARCH 2020

Global GHG budget and methane • Methane emissions account for about 16% of the total of anthropogenic GHG emissions; the Global Warming Potential of methane is 28 – 34 times vs. CO 2 (100 -year timescale). • The oil and gas industry contribute roughly a quarter of the world’s anthropogenic methane emissions and operators in the sector have been trying to reduce their emissions for years, to demonstrate their credibility to stakeholders. 2

Methane emissions: what we do Plans to reduce emissions deploying best practices and BAT Implement Leak Detection & Repair (LDAR) programmes KPIs & emission reduction objectives continually reduce methane emissions improve accuracy of methane emissions data Adoption of universally recognized methodoligies In-field measurement to determine/update emission factors Data disclosed in robust and transparent reporting Actively work with international institutions, associations, industry and academics support the implementation of policies and regulations Give advice and advocate for methane policies, regulations and standards Engagement with upstream, midstream and downstream operators across the value chain

SNAM natural gas emissions (transmission system, UGS, and LNG) • Snam has always been progressively reducing its methane emissions (-12% from 2013 to 2016). • In 2017 additional measures have been launched to mitigate CH 4 emissions ( -19% from 2016 to 2019). • Natural gas emissions account for only 0, 05% of the gas injected into the gas transmission network (75, 4 Bcm in 2019). Mm 3 60 55. 05 50 0, 2 12, 7 40 18, 2 Natural gas emissions by type of emission (including emergencies) 50. 81 49. 74 0, 2 10, 3 0, 2 13, 6 12, 2 24, 0 46. 76 0, 3 12, 5 0, 3 10, 7 15, 9 30 20 48. 24 24, 4 23, 7 12, 6 12, 7 23, 2 22, 8 Natural gas emissions - 2019 44. 37 0, 3 9, 3 12, 1 22, 6 1. 33 Mm 3 39. 25 0, 3 7, 5 10, 4 2, 6 % 0, 8% 19, 1% 23, 4 % 9. 25 Mm 3 [VALORE] % 21, 1 28. 67 Mm 3 53, 7% 26, 4% 10 0 2013 2014 2015 Fugitive 2016 Pneumatic 2017 Vented 2018 2019 Transmission Unburnt Regasification Reduction of 19, 2 % between 2016 and 2019 (net of emergency emissions) Storage Vented Pneumatic Fugitive Unburnt 4

New emissions target CO 2 604 scope 1 Kt. CO 2 Direct Co 2 emissions – 40% @2030 • • 28 scope 2 Kt. CO 2 CH 4 scope 1 Kt. CO 2 eq 55% of green electricity out of total consumption CH 4 target updated: – 40% @2025 • • 2016 CO 2 eq Electrification of ELCO in 6 compressor stations (transmission and storage) • Direct emissions reduction • More efficient compression Energy efficiency on our assets • Renovation of H&C and lighting systems • Heaters replacement Indirect Co 2 emissions: – 40% @2030 • 835 -40% Leak Detection and Repair (LDAR) applied to network, compressing and storage stations • >150, 000 emission measurements over 100 sites • In-field measurement to update emission factors Replacement of ca. 3, 000 pneumatic actuators and instrumentation Scope 1 and 2: -40% @2030 vs 2016 2030 CO 2 eq

Snam strong accuracy of methane emissions data • Robust methodology to calculate emissions (1995 – 2001) in co-operation with the USGas Research Institute and Radian, compliant with the European Marcogaz methodology, developed by the European TSO • All the emitting typologies are considered, according to the international approach: o o Fugitive emissions Pneumatic emissions Vented emissions Combustion emissions (unburnt methane) • Emissions = emissions factors (EF) x activity factors (AF) • New intensive emission measurement campaign for fugitive emissions to improve accuracy started in 2018 6

Measurement campaign for fugitive emissions ü Measurement campaign throughout 2018 and 2019 ü Over 150. 000 measurements on points of potential emission ü Over 100 sites monitored ü Emissions measured according to EN 15446 standard, using a flame ionization detector and, for high emission sources (eg. BD OEL), with High Flow Sampler Stations 13 compressor stations, 8 storage sites in a «site specific» approach measurements performed also with ship discharge GNL LNG Network 74 R&R stations, 12 pig launching/receiving stations 7 1 junction point New Emission Factors from 2020

Network: distribution of losses by type [NOME CATEGORIA] [VALORE] PRVs [VALORE] [NOME CATEGORIA] [VALORE] 8

Compressor Stations : distribution of losses by type (transmission & UGSs) [NOME CATEGORIA] [VALORE] [NOME CATEGORIA] [VALORE] Valves; 3% [NOME CATEGORIA] [VALORE] 9

Snam initiatives to reduce fugitives emissions • Installation in pressure reducing stations of valves to reduce emissions from the condensate tank of filters (approx. 350 stations) and from the blowdown vents (more than 200 stations); • Replacement of gate valves with ball valves in compressor stations (station and TC blowdowns) • Leak Detection and Repair (LDAR) techniques implemented on a regular basis from 2020, with our own personnel 10

Snam initiatives to reduce pneumatic emissions • Conversion of pneumatic controls to compressed air or to electrically controlled devices; • Replacement of high-bleed regulating valve control devices with low emission devices in pressure reducing stations; • Installation of new heaters, mounted on skid, with lower emissions and high efficiency, in pressure reducing stations; More than 3, 000 components to be replaced or dismantled: 11

Snam initiatives to reduce vented emissions • Use of the gas recompression technology, to Mcm recompress gas instead of venting it on the 16 works (below 100, 000 Scm to be recompressed) • Use of hot-tapping technique; 14, 56 14 occasion of maintenance or construction works on 12 the gas transportation network, even for smaller Potential emission without mitigation interventions 6, 36 10 8 0, 88 6 1, 70 0, 26 4 • Pipeline pressure reduction at the lowest possible level on the occasion of maintenance activities or construction works. 10, 41 2 5, 36 0 2018 4, 30 1, 47 56, 3% of potential emissions gas saved In line recopression Recompression in CS Pressure reduction Vented (*) 1, 03 0, 23 58, 7% 3, 38 2019 Hot tapping (*) : transmission system vented emissions, net of emergency emissions 12

LDAR program Identifying components 1 • Assigned a unique ID number to each emitting component in the Enterprise Asset Management (EAM) IT system 2 Leak definition: 5000 ppm Monitoring components: • Elements of a LDAR program • 3 • • The quantification of all leaks is performed with FID (Flame Ionization Detector). ~1. 000 Pressure Reduction Stations, Pig traps, Junctions, 22 compressors stations and UGSs, LNG terminal Frequency: 4 years Activity performed according to EN 15446 Repairing components • 4 5 Recordkeeping: • • • Immediate on-field repair of leaks > 5000 ppm, where feasible. New leak measurement after repair. Cost/Benefit assessment for leaks > 5000 ppm not immediately repairable Tagging of non-repairable leaks Compilation of data collection sheet for delayed leaks > 5000 ppm not immediately repaired at the end of the operations recording of the result of the surveys in EAM and real-time update of facility emissions on a site specific approach. 13

Potential emission reduction from LDAR vs. repair threshold Emission reduction vs. repair threshold Emission sources: CN, CTR-VLV, PRV, VLV Transmission system, UGS, LNG 100% 2, 5% 90% 2, 2% 80% 2, 0% 1, 8% Potential emission 70% 60% 1, 5% 50% 40% 1, 0% 30% Repaired components 100% 0, 7% 23% 20% 0, 5% 0, 4% 10% 0, 0% no repairs overflow > 10. 000 ppm 8% > 5. 000 ppm Repair threshold Emissions (%) Repaired components (%) 4% > 1. 000 ppm 4% > 500 ppm 0, 0% 14

LDAR – Implementation schedule 2019 jan Measurement Campaign Measurement campaign and update of Emission Factors 2020 feb mar apr may june July aug sept oct Assessment of results for use of thermal camera/flow meter nov dec jan feb mar apr may june Update Emission Factors Possible further measurement campaign 1. Definition of organisational model 2. Supplier qualification and purchase of instruments Internalization LDAR 3. Technical standard definition 4. IT System implementation 5. Personnel Training 6. LDAR in operation «detection» module release and emissions calculation in a «site specific» approach Instrument use «repair» module release IT systems use 15

Associations / Partnerships 16

The gas industry must consider the minimisation of methane emissions as an opportunity to actively contribute to short-term mitigation of climate change and further enhance the environmental value of natural gas Several measures to reduce methane emissions are feasible and effective and significant reductions can be achieved 17