Page 9 - NorthAmOil Week 24 2022

NorthAmOil ENERGY TRANSITION NorthAmOil

Southwestern to supply RSG to Uniper

US NATURAL gas producer Southwestern Energy company sell roughly 1.5bn cubic feet (42.5mn
announced on June 14 that it has signed a multi- cubic metres) per day of gas to LNG plants.
year deal to supply certified responsibly sourced The firm completed third-party certification
gas (RSG) to the North American subsidiary of of roughly 3 bcf (85 mcm) per day of Marcellus
Germany’s Uniper. gas production from the Appalachian region in
Under the terms of the deal, Southwestern the first quarter of 2022. Southwestern has also
will supply Uniper with RSG for its US mid- unveiled plans to undergo third-party certifica-
stream gas portfolio, which includes domestic tion for its Haynesville production by the end of
distribution to downstream customers and the year.
also gas to supply US LNG terminals for liq- The company will partner with environmen-
uefaction and transport to markets around the tal assessment firm Project Canary to certify the
world. entirety of its production in both basins.
The supply agreement marks Uniper’s first “Transparency in energy production
RSG deal in the US and its second in North practices is a growing market interest, and
America. In December, Uniper reached a deal agreements like this one are key to deploying
to offtake certified natural gas from Canada’s responsibly sourced solutions for customers in
Vermilion Energy and manage supply to Access the US and abroad,” stated Uniper’s president
Gas Services, a wholesale supplier that provides and CEO for North America, Marc Merrill.
natural gas to commercial, industrial and insti- Third-party gas certification has surged
tutional customers. among US gas producers and over 20 bcf (566
Southwestern says it is the largest dual-ba- mcm) per day is projected to be certified by the
sin gas producer in the US, with operations in end of 2022. For European Union countries,
the Appalachian Basin and the Haynesville purchasing certified gas for liquefaction has
shale play. It is ramping up RSG production in emerged as an option to help wean themselves
both regions and deploys continuous emissions off Russian gas while also pursuing their energy
monitoring at each pad location. Currently the transition goals.™

Chevron expands renewable fuels

business with closing of REG acquisition

US CHEVRON said on June 13 that it has com- capabilities with Chevron’s significantly larger
pleted its previously announced acquisition of manufacturing, distribution and commercial
Renewable Energy Group (REG) after the trans- marketing capacity.
action was approved by REG stockholders. The transaction also gives Chevron additional
The agreement was reached in February, feedstock supplies and pre-treatment facilities
with Chevron set to acquire REG via an all-cash and will aid the company in its ambition to raise
transaction valued at $3.15bn. REG stockholders renewable fuels production capacity to 100,000
The expansion of have approved the purchase at $61.50 per share. barrels per day (bpd) by 2030. Chevron’s renew-
REG’s renewable diesel The total enterprise value of $2.75bn includes able fuels business will now be headquartered in
production facility in a net cash position around $400mn greater than Ames, Iowa, following the closing of the deal.
Geismar, Louisiana, is debt. The transaction price represents a pre- “We have brought together companies with
currently underway. mium of around 57% on a 30-day average based complementary capabilities, assets and cus-
on closing stock prices on February 25. tomer relationships to make Chevron one of
The deal is also expected to be accretive to the leading renewable fuels companies in the
Chevron’s earnings this year and accretive to United States,” stated Chevron’s executive vice
free cash flow following the start-up of REG’s president of downstream and chemicals, Mark
renewable diesel production facility expansion Nelson. “Chevron now offers our customers an
in Geismar, Louisiana. expanded suite of cost-effective, lower-carbon
The $950mn expansion is projected to solutions that utilise today’s fleets and infrastruc-
be mechanically complete by 2023 and fully ture,” he added.
operational in 2024. It will increase total site Meanwhile, Chevron has appointed REG’s
production capacity at the facility by 90mn gal- former president and CEO, Cynthia “CJ”
lons (2.1mn barrels) per year to 340mn gallons Warner, to Chevron’s board of directors.
(8.1mn barrels) per year. REG operates 11 biorefineries in the US and
The acquisition combines REG’s grow- Europe and produced 519mn gallons (12.4mn
ing renewable fuels production and feedstock barrels) of cleaner fuel in 2020.™

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