Southwestern Energy seeks third-party gas certification for Haynesville production

Southwestern Energy will complete third-party certification for the entirety of its natural gas production in the Haynesville Shale, partnering with environmental performance analysis firm Project Canary, the companies announced Feb. 8.

As part of the commitment, Southwestern will install Project Canary continuous monitoring sensors at the pad level, which executives highlighted as a selling point.

"The ability to monitor emissions from our operations at the pad level is a clear differentiator and will allow SWN to efficiently and effectively reduce emissions," Southwestern CEO Bill Way said in a statement.

Southwestern has historically operated in Appalachia and the Fayetteville Shale, only recently expanding into Louisiana's Haynesville and Bossier Shales with two acquisitions in 2021. The company completed its acquisition of Indigo Natural Resources in September and its acquisition of GEP Haynesville in December.

Southwestern's Haynesville production averaged around 1.7 Bcf/d, as of the company's Nov. 4 third-quarter earnings presentation, with executives expressing expectations that plans to harness synergies and scale from the two acquisitions could lead to higher production.

Certified gas in the Haynesville Shale

Southwestern expects that the Haynesville certification process will be completed by the end of 2022.

Including Southwestern, Haynesville gas producers have committed to certify just over 6 Bcf/d of gas production by the end of 2022, 1.2 Bcf/d of which has already been completed, according to publicly made company announcements.

Other Haynesville producers that have signed up for third-party gas certification include Comstock Resources, Chesapeake Energy, and BPX Energy.

The full volume of gas currently undergoing third-party certification is likely higher, with some companies waiting to receive the certification results before making efforts public. There are also a number of pilot programs that have not disclosed the volumes involved or expected completion date.

Even just including public commitments, certified gas will account for 45% of the basin's production by the end of the year. Haynesville gas production has averaged 13.7 Bcf/d year-to-date, data from S&P Global Platts Analytics shows.

A pioneer of certified gas

Southwestern Energy was an early adopter of third-party gas certification, inking the country's first publicly announced deals in 2018 and 2019. Denver-based Project Canary's predecessor, IES, served as the certifier for these early transactions.

"Beyond the clear ESG sustainability benefits, we believe that responsibly sourced gas will ultimately lead to enhanced margins and improved economics from greater access to global markets," Way said in the company's Nov. 4 third-quarter earnings call.

The producer partnered again with Project Canary in June 2021 to certify all of its Appalachia gas production, with the process expected to reach completion by March 2022. After the completion of its Haynesville and Appalachia certification efforts, the company expects to have more than 5 Bcf/d of certified gas to market.