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ExxonMobil is latest US producer to seek certification of some natural gas output

Highlights

200 MMcf/d from Permian Basin in New Mexico selected

Methane emissions intensity to be independently assessed

ExxonMobil will assess the methane emissions from 200 MMcf/d of natural gas output from a section of its Permian Basin holdings, with the potential for expanding the effort to other production fields, the company said Sept. 7.

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The idea of certifying gas to quantify emissions, meet environmental goals and create new business has spurred similar initiatives across the US upstream and midstream sectors over the last year.

From detailing their carbon footprints to trying to capture carbon before it is released to identifying supplies that are responsibly sourced, companies are mindful of an energy future that will increasingly favor cleaner burning fuels.

ExxonMobil, which more than doubled its Permian position in 2017 through a series of purchases from the Bass family, hired independent validator MiQ to begin the certification process for the selected gas production. Poker Lake, in New Mexico, was chosen in part because of its proximity to nearby markets and the production growth the area holds, ExxonMobil said in a statement.

An MiQ accredited independent auditor performs the assessment, and MiQ issues tradable certificates based on the grade achieved.

May expand certification

ExxonMobil said it is considering expanding certification to include other Permian Basin fields and shale production areas, including the Appalachian Basin in the US Northeast and the Haynesville Shale in Louisiana.

MiQ, a partnership between RMI, formerly the Rocky Mountain Institute, and SYSTEMIQ, a global sustainable development consultancy, is already working with several other major US producers and midstream companies on independent certification of natural gas. The list includes EQT, the biggest US gas producer, which said in April that most of its Marcellus output -- about 4 Bcf/d -- would undergo an assessment of its environmental impact with the help of MiQ and a second group, Equitable Origin.

S&P Global Platts is facilitating the creation of a certificate market for detected methane emissions that includes its own defined methane intensity threshold. The goal is to facilitate the pricing and trading of certified gas certificates in a transparent manner.

Poker Lake in Eddy County has been a focus of ExxonMobil in the Permian. It started operations last year at its Delaware sub-territory central processing facility to collect oil and gas supply for delivery to US Gulf Coast export markets.

Fourth-quarter availability possible

The certified gas at Poker Lake could be available to customers by the fourth quarter of this year, ExxonMobil said.

ExxonMobil has previously announced plans to further reduce greenhouse gas emissions in its operations by 2025, compared with 2016 levels. The plans include a 15%-20% reduction in GHG intensity of upstream operations.