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It’s all about the ESG (and RSG): Southwestern Energy and Kinder Morgan stroke a deal for gas transportation
10/20/2021
In order to further its commitment to reducing emissions across the natural gas value chain, Southwestern Energy Co. recently signed an agreement with Kinder Morgan Inc. for the transportation of responsibly sourced natural gas (RSG) to the Northeast markets. Tennessee Gas Pipeline, a subsidiary of Kinder Morgan, will be carrying out this notion since Nov.1.
The term "RSG" refers to natural gas that has been produced by a well and transported by companies whose operations have been independently verified for meeting certain environmental, social, and governance standards, including those relating to methane emissions.
Southwestern is currently one of the biggest producers of natural gas and natural gas liquids in the United States. The exploration, production, and development of natural gas, natural gas liquids, and crude oil from the nation's most prolific and unconventional gas fields found in the Appalachian and Haynesville shale basins are its primary business.
At the moment, the company is a leader of the pack when it comes to responsibly sourced gas. The fact that in 2017 Southwestern had already certified its first well as responsibly sourced through a partnership with Project Canary certainly contributes to its reputation a fair bit. Even more so, since then, Project Canary was expanded to include Southwesterns' entire Appalachian Basin natural gas production.
Morgan, on the other hand, is an energy infrastructure company, which provides pipelines and terminals for safe and clean transportation of natural gas, gasoline, crude oil, CO2, and other products, as well as for adequate storing of petroleum products and chemicals.
Yet, this partnership does not come as a surprise.
Southwestern's president and CEO, Bill Way, believes responsibly sourced gas is essential to providing a low-carbon energy future. And creating cleaner energy for customers throughout the United States and beyond is one of the company's goals as well as the purpose of this innovative agreement with Kinder Morgan.
In terms of annual electricity generation, the distribution of the RSG to the Northeast markets is expected to power the equivalent of about 100,000 homes while reducing greenhouse-gas emissions to the equivalent of removing 5,000 internal combustion cars off the roads.
Southwestern and Morgan are pleased with such an arrangement, not to mention that they will enjoy some good press coverage out of it as well.
According to Tom Martin, Morgans' president of natural gas pipelines, this is just one of several RSG initiatives currently underway and aligns splendidly with their commitment to minimize methane emissions associated with the production and transportation, storage, and distribution of natural gas.
The two companies are also founding members of the ONE Future Coalition, a group of 50 industry giants working together to reduce methane emissions across the Natural Gas value chain to 1% (or less) by 2025. But the coalition already registered a methane intensity number of 0.334% in 2019, beating its own target by 67% ahead of time. It proves that the natural gas industry can simultaneously provide much-needed long-term renewable energy and also minimize methane emissions.
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ONEOK Buys Magellan for $18.8 Billion: Overview of the Huge M&A Deal in the Pipeline Industry
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In May, ONEOK (OKE) made an announcement regarding its acquisition of Magellan Midstream Partners LP (MMP) for a total value of $18.8 billion, which includes cash and stocks. This move drew attention as it positions ONEOK, primarily known for its involvement in the provision, gathering, and processing of Natural Gas (NG), to become one of the largest pipeline companies in the United States. The acquisition also allows ONEOK to expand its services by including Oil (CL), another significant energy commodity.
Merger of Equals: Whiting and Oasis $6B Deal
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The two Bakken shale producers announced in a joint statement on March 7 that they had reached an agreement to unite in a $6 billion "merger of equals." Combining these two companies will create a leading Williston Basin position with assets covering approximately 972,000 net acres, production of 167,800 boe/d, and an enhanced free cash flow generation that will generate capital returns to shareholders. A historic collapse in oil prices prompted both Whiting and Oasis oil companies to file for Chapter 11 bankruptcy protection in 2020. Thus, the merger can be viewed as a preventive measure to avoid going out of business.
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Rangeland Energy has agreed to sell Rangeland Midstream Canada to Kingston Midstream Alberta and remains committed to future Canadian midstream investments. Texas-based Rangeland Energy, supported by financial partner EnCap Flatrock Midstream, has inked a deal to sell its Canadian subsidiary, Rangeland Midstream Canada Ltd., to Calgary's Kingston Midstream Alberta Ltd. for cash.
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The merger between ONEOK and Magellan received approval from Magellan shareholders, securing just 55% of the total votes at Magellan’s meeting on Sept. 21. ONEOK Inc. has successfully concluded the acquisition of Magellan Midstream Partners LP on Sept. 25. The deal will bring together their respective assets and expertise, resulting in a powerful entity boasting an extensive network of approximately 25,000 miles of pipelines primarily focused on transporting liquids.
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Viper Energy's deal, comprised of cash and equity, secures an additional 2,800 net royalty acres in the Midland Basin and 1,800 in the Delaware Basin. Viper Energy Partners LP, a Diamondback Energy Inc. subsidiary, has inked a deal to acquire mineral and royalty interests in the Permian Basin. The deal, valued at around $1 billion, is with Warwick Capital Partners and GRP Energy Capital. Viper was established by Diamondback with the purpose of owning, purchasing, and capitalizing on oil and natural gas assets in North America, specifically targeting mineral and royalty interests.