Tennessee Gas Pipeline Company (TGP), a subsidiary of Kinder Morgan Inc. received approval on July 1 for its producer certified gas (PCG), or responsibly sourced gas (RSG), aggregation pooling service from the Federal Energy Regulatory Commission (FERC).
The PCG aggregation pooling service is now available at all pooling points across the TGP system. PCG is conventional natural gas sourced from production facilities that have been certified by a qualified third party to meet certain ESG standards that typically focus on management practices for methane emissions, water usage and community relations.
The service is designed to enable shippers on TGP to purchase and sell PCG supply at non-physical pooling locations, ultimately serving end-users, utilities, power plants and LNG facilities connected to the TGP system.
“After working closely with producers and customers, we are pleased to offer a PCG aggregation pooling service that meets their needs as they exist today,” said TGP’s Vice President of Commercial Ernesto Ochoa. “We believe this positions TGP as a leader in the energy transition because this service facilitates greater transparency and liquidity into markets for this important, lower-emissions energy source.”
Parties who have obtained certifications from qualified third-party organizations are supplying the PCG needed for the pooling service, and the supply is expected to grow as PCG becomes the fuel of choice among customers. TGP plans to continue working with producers and customers to refine this service as regulations and markets evolve.
"The pooling improves transparency and could answer the question whether RSG earns a premium," Subash Chandra, Equity Research Analyst at Benchmark Co., noted in a commentary.
He added,"Southwestern Energy is the most aggressive in certifying their gas but many others are not far behind. Certified gas may be preferred for LNG exports and earn a premium in that regard as well. We should soon be able to tell."