Clean Development Mechanism Project

Japan Vietnam Petroleum Co., Ltd. (a subsidiary of Nippon Oil Exploration), had been flaring associated gas, which is generated as by-product of crude oil production at its Rang Dong oil field located offshore southern Vietnam. Currently, the company is recovering the associated gas and providing it through a new underwater pipeline to onshore electric power plants in Vietnam. This project enables power plants to reduce their consumption of other fuel, thereby realizing an approximately 6.8 million-ton reduction in CO2 emissions (estimated annual reduction of 680,000 tons over 10 years). This amount is approximately equivalent to the amount of CO2 annually absorbed by a 230km2 forest of Japanese cypress trees, an area roughly three times the area within the Yamanote Line, which rings Tokyo's central districts.
In February 2006, this associated gas recovery and utilization project was approved as a Clean Development Mechanism Project* (CDM Project) by the CDM Executive Board (CDM EB) of the United Nations Framework Convention on Climate Change (UNFCCC). The project is realizing the largest CO2 emission reduction CDM Project in the world, and it is the first CDM Project involving associated gas recovery and utilization. After the actual emission reduction volume is verified, certified emission reduction credits will be issued.

*Within the framework of the Kyoto Protocol, when the industrialized countries and developing countries cooperatively achieve CO2 emission reductions, the relevant UN unit will issue certified emission reduction credits corresponding to the size of the reduction.