May 2, 2024
MODEC, Inc.
JGC Holdings Corporation

GHG Emissions quantification project completed at FPSOs in Brazil– A first by Japanese Companies –MODEC, Inc. (MODEC) and JGC Corporation, an overseas EPC operating company of JGC

Holdings Corporation, are pleased to announce the completion of a project to measure andquantify emissions of methane and other greenhouse gases (GHG) from floating production,

storage, and offloading systems (FPSO) off the coast of Brazil, chartered and operated by
MODEC1. This represents a significant milestone for both companies, and this is the first timethat Japanese companies gain precise insights into the amount of major GHG emissions frommethane, nitrous oxide, and hydrofluorocarbons (HFCs) from active FPSOs.

1.

Project background

In its Mid-term Business Plan 2024-2026, MODEC states that one of the initiatives under Vision
2034 is to be the world's best FPSO builder and operator, achieving the smallest carbon
footprint alongside safety and high uptime.

As a first step in decarbonizing the MODEC’s

core FPSO business, MODEC is actively involved in measuring and reporting FPSO GHGemissions. In addition to carbon dioxide emissions, this project also addresses methane, nitrous
oxide2, and HFCs, which have a very high greenhouse effect.

JGC Corporation is engaged in mitigating GHG emissions from oil and gas production facilities
in part by leveraging technical engineering expertise and extensive plant construction
experience to provide HiGHGuard® GHG emissions measurement service for methane andother GHGs using the MRV3 methodology. In the absence of globally standardized
measurement methods, JGC offers highly reliable measurement and quantification in line withplant operations and these conditions, as well as low-carbon/decarbonized solutions based on
this knowledge.
Building upon this expertise, MODEC and JGC Corporation have decided to combine theirstrengths to implement a project aimed at accurately identifying methane, nitrous oxide, andHFCs emissions from FPSOs.
2.

Project overview

A quantification of emissions of the three GHGs – methane, nitrous oxide and HFCs – was carried out
from July to September 2023 at two MODEC-chartered FPSOs off the coast of Rio de Janeiro.

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While the need for emission prevention measures, particularly for methane, has increased inrecent years, methane emissions vary widely from facility to facility, and because desktop
calculations with common coefficients are not accurate enough; there has been a strong

international recommendation that emissions should be determined by actual measurements.
Therefore, MODEC and JGC selected two methods of on-site measurement: a bottom-up

approach using hand-held sensors and infrared cameras, and a top-down approach using

drones (See Figure. 1 below). The bottom-up approach measures approximately 15,000
potential methane emission points in the FPSO, and the latter approach captures the methane
potential of plant-wide emissions from flying the drones around the FPSOs.

Some examples of project results are as follows:Determination of methane and other GHG emission levels with much greater precision
than conventional desktop calculations.

Establishment of a highly reliable methodology for measuring methane emissions bycombining multiple measurement technologies.

Identification of individual methane emission points on FPSOs, with results leading tospecific emission prevention measures.

Figure 1: Measuring methane at an FPSO
Table 1: Characteristics of the two methods
MethodMeasuring devices
Target ofmeasurement

Bottom-up approach
Hand-held sensors, infrared
cameras, etc.

Individual emission sources

Top-down approach
Drone-mounted sensors
Entire FPSO, specific emission
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The methodology meets the requirements of levels 4 and 5 (the highest)5 in the reporting

framework established by the Oil & Gas Methane Partnership 2.0 (OGMP 2.0)4, an international
methane emission mitigation program.

Verification of the measurement results confirms that the combination of the two approaches
enables quantification of GHG emissions with much greater precision than conventional desktop
calculations6 using common emission factors, and the results are considered to be highly

reliable from an international standpoint.
3. Future policies

MODEC, as a leading company in offshore oil and gas development, aims to further improve theprecision of GHG emissions calculations and expand the scope of emissions data disclosure. As apart of its charter business, MODEC will also create value for its clients by providing emissions

quantification services that are compliant with frameworks such as OGMP 2.0 and requiring
minimal effort in the field, as well as additional services such as planning and implementation ofemission reduction measures. Improved FPSO design and operation, achieved through theapplication of new technologies discovered and proven through R&D and other methods, will
also reduce the carbon intensity of MODEC’s FPSO services and contribute to decarbonization ofthe global energy supply chain.

JGC Corporation aims to be a leader in the reduction of industrial methane emissions and other

GHG emission by quantifying and consulting of the methane and other GHG emissions. In viewof growing international demand for measurement instead of conventional desktop calculations
to quantify methane emissions in particular, JGC plans to apply project results in providing
highly reliable measurement methods, emission control measures, and other services as a
packaged solution.

Besides, JGC operates a facility for evaluating methane emission measurement technologies at
the R&D center in Ibaraki Prefecture in Japan. JGC aims to leverage this facility and work withsensor manufacturers domestically and internationally to advance partnerships, allowing JGC toquickly utilize cutting-edge measurement technology in the future project.

1:

Lease of FPSOs to oil exploration and production companies as well as providing crews, undertaking
operation, maintenance, and inspection services (O&M).

2:

According to IPCC estimates, methane and nitrous oxide have global warming potentials about 28 and 273
times higher than CO2 over 100 years, respectively. The high impact of these gases has drawn attention inrecent years. More than 150 countries are now participating in an initiative to reduce methane emissions
called the Global Methane Pledge, launched at COP26 in November 2021.
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MRV: Measurement, reporting, and verification.

4:

OGMP was launched in 2014 and led by the UN Environment Programme (UNEP), in 2020, the OGMP2.0
has become the most comprehensive methane emissions reporting framework in use today. Members
include major global oil and gas companies such as Shell, BP, TotalEnergies, Petrobras, Petronas and PTTEP.

5:

Among the five levels of reporting in OGMP 2.0, levels 4 and 5 require on-site measurement. For thecompanies that have joined OGMP2.0 to maintain their Gold Standard status, Level 4 or 5 reporting isrequired within three years for their operated assets and within five years for non-operated assets such as
joint ventures.

6:

Methodologies such as the API Compendium that calculate GHG emissions by integrating the amount ofactivity and emission factors.

Press Contact
MODEC: Corporate Planning & Strategies Dept. (Phone +81-3-5290-1240)
JGC Holdings: Corporate Planning Unit, Corporate Communications Group(Phone +81-45-682-8026)

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