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The green trend: TC Energy pledges to be carbon-free by 2050

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To achieve carbon neutrality from operations, TC Energy Corporation announced its environmental, social, and governance (ESG) goals, as well as emission reduction strategies.

Currently, this Calgary-based Canadian company is a leading midstream energy services provider among those focused on natural gas. Yet, aside from pipeline maintenance and power generation, the company also distributes and stores natural gas.

Over the past six months, TC Energy's stock has outperformed the industry average with almost a 3 point lead: gaining 11.3% versus 8.6%.

Due to the global industry moving towards green energy, an increasing number of investors and environmental groups are pushing the company to become 100% emission-free by 2050. In addition, these pressures align with the plans of Canada's prime minister, Justin Trudeau, which envisions a relatively quick transition for the country from carbon to renewable energy sources.

Thus, it came as no surprise when TC Energy announced that it would target this goal alongside them, as well as hope to cut greenhouse-gas emissions intensity from its operations by 30% by 2030.

Five major areas will be targeted by the company to reduce the intensity of its emissions. By acquiring low-carbon energy sources and investing in low-carbon energy, TC Energy will reduce its carbon emissions. It also plans to use carbon credits and offsets. Aside from this, the company also plans to improve efficiencies in its operations with some additional automation of the linear processes. It will help manage emissions, reduce methane leaks and flaring from normal operations.

The carbon dioxide, methane, and nitrogen oxide emissions that TC Energy targets pertain to Scope 1 and 2. The company's natural gas pipeline assets generate these emissions primarily from fuel combustion. It is commendable, that as an interim measure to reach net-zero emissions, TC Energy also commits to reducing Scope 3 emissions.

Additionally, a partnership between TC Energy and Nikola Corporation NKLA was announced in early October in order to build hydrogen production facilities in the U.S. and Canada, as part of each company's sustainability initiatives. Hydrogen is particularly important when it comes to carbon neutrality.

But TC Energy is not alone in this process. Investors' demands to reduce emissions have pushed a lot of industry's top players to set targets to increase renewable capacity and improve efficiency. And in order to clean up the environment, energy companies invested billions of dollars in renewable energy.

Pipeline operator Enbridge Inc. is a prime example of such a trend. Last year the company set emissions reduction targets, hoping to be a net-zero emitter of greenhouse gases by 2050 as well. In the future, we anticipate that there will be a significant increase in pledges like this one. But whether or not they will be fruitful still remains to be seen.

Watch how you can use Rextag to identify ESG improvement opportunities in our latest webinar here: https://youtu.be/XBa_MbL0FME

If you are interested in learning more about the industry's journey to sustainability, as well as how it may impact your local businesses, please, connect with our Houston sales office to see our intelligence for yourself.

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Ain't Nothing Like a $2 Billion Deal: Oasis Sells Midstream Affiliate to Crestwood

Crestwood & Oasis Midstream merge to create a top Williston #basin player. $1.8 billion deal is expected to close during the Q1 of 2022. The transaction will result in a 21.7% ownership stake for Oasis in Crestwood common units. The remaining ownership of Oasis in Crestwood will also be of benefit to the company since it will create a diversified midstream operator with a strong balance sheet and a bullish outlook after this accretive merger.

Ironwood Midstream expanded its operations in the Eagle Ford region through its merger with Nuevo Midstream. Thanks to this, Ironwood II has increased its crude oil and natural gas throughput capacities in the famous shale to approximately 400,000 bbl/d and 410 MMcf/d, respectively. With 390 miles of pipelines, the company manages 245,000 acres of dedicated land.

Shareholder’s payout target was increased by 50% after the largest U.S. independent oil producer surpassed Wall Street’s earnings estimates on growing energy prices, said Houston-based Conoco Phillips Co. on Aug. 4. Due to Western sanctions on major producer Russia throttling energy supply amid a rebound in demand from pandemic lows, oil and gas #prices have soared. Crude has been trading more than 25% higher since the start of the year and results also benefited from high natural gas prices. Meanwhile, shares were down a fraction, to $91.03, in early trading but are up about 26% year to date. Conoco Phillips stated, that the average price obtained for a barrel of oil and gas accelerated 77% from a year earlier to $88.57. The company acknowledges that it has not hedged any of its oil and gas sales to make the most of higher market prices. The capacity of 1.69 million boe/d was in line with Wall Street estimates, however, the company expected the current quarter’s output would be between 1.71 million and 1.76 million boe/d.

California oil joint venture, Aera Energy, of Exxon Mobil Corp. and ShellPlc is being sold to German asset manager IKAV, according to the agreement of Sept. 1. Shell noted that the sale of its 51.8% membership interest in Aera Energy is for a total consideration of about $2 billion in cash with additional contingent payments based on future oil prices, subject to regulatory approval. However, the total transaction value was not disclosed. Being one of California’s largest oil and gas producers, Aera Energy accounts for nearly 25% of the state’s production. The sale by Exxon Mobil and Shell ends a 25-year-long partnership in California, meanwhile, it persists a streak of divestments of mature oil and gas properties by the two supermajors. Aera Energy LLC operates about 13,000 wells in the San Joaquin Valley in California, producing oil and associated gas. In 2021, Aera took out about 95,000 boe/d. Exxon Mobil’s interests in the Aera oil-production operation in California contained a 48.2% share of Aera Energy LLC and a 50% share of Aera Energy Services Co. held by Mobil California Exploration & Producing Co. Moreover, Exxon Mobil affiliates have signed a separate agreement for the sale of an associated loading facility and pipeline system. The sale effectively ends Shell’s upstream position in California. The company reported that the divestiture is valued to result in a post-tax impairment of $300 million to $400 million, subject to adjustments.

The completion of the merger between Centennial Resource Development Inc. and Colgate Energy Partners II LLC happened on Sept. 1, sealing the debut of Permian Resources Corp., which is considered the largest pure-play E&P company in the Delaware Basin. Permian Resources’ idea was to combine two successful E&P companies, creating a better, stronger, and more strategically compelling company. Centennial and Colgate announced an agreement to merge in May, denying rumors that Colgate, a privately held independent Midland-based company, had been seeking an IPO. The merger estimated Colgate at about $3.9 billion and consists of 269.3 million shares of Centennial stock, $525 million of cash, and the assumption of approximately $1.4 billion of Colgate’s outstanding net debt. Permian Resources, being the combined company, has a deep inventory of “high-quality” drilling locations on around 180,000 net acres the companies anticipate will provide more than $1 billion of free cash flow in 2023 at current strip prices, in accordance with the company release on Sept. 1.

2022 blog posts