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Southwestern (SWN) Signs Deal to Produce RSG for Northeast Market

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Southwestern Energy Company (SWN - Free Report) entered a responsibly sourced natural gas (“RSG”) agreement with Tennessee Gas Pipeline (“TGP”), a subsidiary of Kinder Morgan, Inc. (KMI - Free Report) , to reduce methane emissions along the natural gas value chain.

RSG is a conventional natural gas that is produced and transported by companies, whose operations have been verified to be complying with the environmental, social and governance (ESG) standards.

RSG goes through a rigorous verification process to validate that it meets or exceeds standards set by the ONE Future coalition, of which Southwestern and TGP are members. ONE Future is aimed to obtain a 1% or lower methane intensity level, or 99% methane efficiency by 2025.

Project Canary will implement its TrustWell certification process and constant emission-monitoring devices to Southwestern’s production sites in the Appalachian Basin, ensuring a methane intensity rate of 0.28% or lower, per the ONE Future upstream targets.

According to the latest ESG report, Southwestern obtained an intensity rate of 0.055% in 2019 and continues to reduce emissions. Then again, the Kinder Morgan transportation network, which includes TGP, significantly beat its 0.31% ONE Future transmission target with a 0.03% rate in the same year.

As part of the deal, Southwestern will produce RSG and TGP will transport it on its pipeline infrastructure to supply the Northeast market. This is expected to power the equivalent of 100,000 homes per year, while taking 5,000 internal combustion engine vehicles off the road.

Southwestern believes that RSG is foundational to a low-carbon future and the latest agreement to benefit Northeast customers is an indication of its commitment to help bring about that future. With the agreement, the company continues with its efforts to provide cleaner energy to customers across the United States and beyond. The market will begin experiencing the benefits of RSG from Nov 1, 2021.

Company Profile & Price Performance

Headquartered in Houston, TX, Southwestern is an upstream company, which engages in the exploration, development and production of natural gas, crude oil and natural gas liquids in the United States.

Shares of the company have underperformed the industry in the past six months. The stock has gained 9.2% compared with the industry’s 23.9% growth.

 

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Zacks Rank & Stocks to Consider

Southwestern currently carries a Zack Rank #3 (Hold).

Some better-ranked players in the energy space are Royal Dutch Shell plc and Cheniere Energy, Inc. (LNG - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shell’s 2021 earnings are expected to increase 13.7% year over year.

Cheniere’s 2021 earnings are expected to surge 119.7% year over year.


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