BP’s 2025 LNG Pivot: How Carbon Capture (CCUS) is Decarbonizing its Global Gas Portfolio

Industry Adoption: How BP is Integrating Carbon Capture (CCUS) into its LNG Growth Strategy

Between 2021 and 2024, BP’s approach to decarbonizing its Liquefied Natural Gas (LNG) value chain was primarily characterized by market-based mechanisms and strategic positioning. The company initiated this phase by delivering “carbon offset” LNG cargoes to partners in Mexico and Taiwan in 2021, a solution that addressed emissions through external credits rather than internal abatement. Concurrently, BP began building foundational capabilities in adjacent low-carbon sectors through its $4.1 billion acquisition of US renewable natural gas (RNG) leader Archaea Energy and a joint venture with Clean Energy Fuels. These moves signaled an intent to control alternative gas molecules. The strategy took a more concrete, infrastructure-focused turn in 2023 with the Aker BP and Höegh LNG partnership, which aimed to develop a full-scale carbon capture and storage (CCS) value chain in Europe, laying the conceptual groundwork for future projects.

The period from 2025 to the present marks a decisive inflection point, shifting from conceptual frameworks and offsets to large-scale, capital-intensive execution. The most significant validation of this pivot is the Final Investment Decision (FID) on the approximately $7 billion Tangguh UCC (Ubadari, CCUS, Compression) project in Indonesia. This is not a pilot but a world-scale integrated project designed to reinject about 30 million tons of CO2, fundamentally linking new gas production to permanent carbon storage. This shift from offsetting emissions to abating them at the source is further evidenced by a 2025 consortium with Chevron and ExxonMobil to evaluate Ocean Thermal Energy Conversion (OTEC) for powering deepwater operations. This variety—spanning integrated CCUS, novel renewable power, and hydrogen refueling for offshore wind vessels—demonstrates that BP is now deploying a multi-technology strategy to decarbonize hard assets across the entire gas value chain, moving well beyond the initial phase of market-based solutions.

Table: BP’s Key Investments in LNG Decarbonization and Related Ventures

Table: BP’s Strategic Partnerships for LNG Decarbonization and Technology Development

Geographic Focus: BP’s Decarbonization Efforts From Indonesia to the Middle East

Between 2021 and 2024, BP’s LNG decarbonization activities were concentrated in Asia and North America. Indonesia was the epicenter, with the multi-billion dollar expansion of the Tangguh LNG facility culminating in the landmark FID for the Tangguh UCC project. This made Indonesia the primary proving ground for BP’s integrated CCUS-and-gas strategy. Simultaneously, North America, particularly the U.S., served as the hub for its bio-methane strategy through the acquisition of Archaea Energy and the Clean Energy Fuels JV. In Europe, activity was more strategic than operational, exemplified by the Norway-based Aker BP and Höegh LNG partnership to design a CCS value chain, indicating a focus on future infrastructure rather than immediate projects.

From 2025 onwards, the geographic map of BP’s activities has significantly expanded and deepened. While Indonesia remains a critical execution hub for the Tangguh project, the Middle East has emerged as a new strategic core. The partnership with ADNOC on the low-carbon Ruwais LNG project in the UAE positions BP in a key, cost-advantaged production region with a clear decarbonization mandate. This Middle Eastern focus is reinforced by the Arcius Energy JV in Egypt, creating a platform for gas development that could replicate the low-carbon model in the Eastern Mediterranean. This expansion shows a clear strategy: anchoring massive, integrated abatement projects in core production zones (Indonesia) while simultaneously entering new, strategically important regions (UAE, Egypt) through partnerships centered on next-generation, lower-carbon gas development.

Technology Maturity: BP’s Journey from Offsets to Integrated Carbon Abatement

In the 2021–2024 period, BP’s technology strategy for LNG decarbonization was a portfolio of commercially available and developing solutions. At the most mature end, the company utilized market-based carbon offsetting to deliver “carbon-neutral” LNG cargoes and made a significant commercial play into the mature renewable natural gas (RNG) market with the Archaea acquisition. These were immediately deployable solutions. In parallel, technologies in the pilot and development phase included advanced methane emissions monitoring with Baker Hughes (`lumen`) and conceptual work on large-scale CCS through its Aker BP partnership. The emphasis was on acquiring or offsetting low-carbon molecules and improving emissions measurement, rather than fundamentally altering the production process of its core LNG assets.

The period from 2025 to today represents a decisive shift toward the commercial-scale deployment of integrated abatement technologies. CCUS has graduated from concept to commercial reality with the $7 billion FID for the Tangguh UCC project, which is designed to handle 30 million tons of CO2. This moves CCUS from a hypothetical add-on to a core, enabling technology for a major gas development. Simultaneously, BP is de-risking future options by entering the evaluation phase for more novel technologies like Ocean Thermal Energy Conversion (OTEC) to power offshore facilities. The commissioning of a hydrogen refueling station in Belgium via its JERA Nex bp JV also represents a tangible, albeit niche, commercial application of a future fuel. This trend demonstrates a clear progression from buying and offsetting carbon attributes to investing billions in engineering and building integrated, large-scale technological solutions to abate emissions at the source.

Table: SWOT Analysis: BP’s LNG Decarbonization Strategy

Forward-Looking Insights and Summary

BP’s activities in 2025 signal an unwavering commitment to natural gas as a long-term pillar of its business, but with a critical and non-negotiable layer of decarbonization. The recent data points to a strategy of execution and expansion, moving beyond the planning phase. In the year ahead, market actors should watch for progress on the Tangguh UCC project as a key indicator of BP’s ability to deliver large-scale, integrated CCUS. The successful arbitration outcome against Venture Global has validated the importance of contractual enforcement and will likely embolden BP in negotiating robust terms for its future supply and offtake agreements.

The Arcius Energy joint venture with ADNOC in Egypt is a crucial signal to monitor; it could serve as a blueprint for future low-carbon gas developments in the Eastern Mediterranean, replicating the model established at Ruwais. Furthermore, the OTEC consortium with other supermajors, while early-stage, represents a potential breakthrough for decarbonizing offshore operations and should be watched for pilot-stage announcements. Ultimately, BP’s strategy is no longer just about growing its LNG portfolio to its 30 mtpa target but about building a differentiated, more resilient, and lower-carbon portfolio. For energy professionals and investors using research platforms like Enki to track market dynamics, the key metrics to watch will be project execution milestones at Tangguh and GTA, new partnerships in strategic gas basins, and any further investments in abatement technologies beyond CCUS.

Frequently Asked Questions

What is the biggest change in BP’s strategy for decarbonizing its LNG business since 2025?
The biggest change is a shift from using market-based solutions like carbon offsets to direct, large-scale technological abatement. Instead of buying credits to offset emissions, BP is now investing billions in projects like the Tangguh UCC in Indonesia, which integrates Carbon Capture, Utilization, and Storage (CCUS) directly into the gas production process to permanently store CO2 at the source.

What is the Tangguh UCC project and why is it significant?
The Tangguh UCC (Ubadari, CCUS, Compression) is a ~$7 billion project in Indonesia that combines the development of the Ubadari gas field with a large-scale carbon capture facility. It is significant because it is BP’s first world-scale integrated CCUS project, designed to capture and store approximately 30 million tons of CO2. It represents a major validation of BP’s pivot from offsetting emissions to abating them directly at a core LNG asset.

How are partnerships central to BP’s LNG decarbonization strategy?
Partnerships are crucial for sharing costs, mitigating risk, and accessing technology. For example, BP is partnering with MI Berau and CNOOC on the ~$7 billion Tangguh UCC project, with ADNOC on the low-carbon Ruwais LNG project in the UAE, and with Chevron and ExxonMobil to evaluate new technologies like Ocean Thermal Energy Conversion (OTEC). These collaborations allow BP to pursue capital-intensive projects and enter strategic new regions like the Middle East.

Besides CCUS, what other technologies is BP exploring for decarbonization?
BP is pursuing a multi-technology strategy. Key investments include: 1) Renewable Natural Gas (RNG) through its $4.1 billion acquisition of Archaea Energy to create lower-carbon bio-LNG. 2) Ocean Thermal Energy Conversion (OTEC) in a consortium to power deepwater operations with renewable energy. 3) Hydrogen, demonstrated by a refueling station commissioned by its JERA Nex bp joint venture for the maritime sector.

What are the main risks in BP’s current decarbonization strategy?
According to the SWOT analysis, the primary risks have shifted from a reliance on offsets to the immense challenges of execution. Key risks include: 1) High capital intensity and execution risk associated with multi-billion dollar projects like Tangguh UCC. 2) Counterparty and contractual risk, as highlighted by the major arbitration case with Venture Global over failure to supply LNG cargoes.