Certarus Ltd. has entered into a flare gas capture and compressed natural gas supply agreement on Aug. 19 with a multinational American energy supermajor to service its electric hydraulic fracturing operations in the Delaware and Midland basins.
This is the first Permian Basin contract that Certarus has entered into for the sourcing of compressed natural gas through flare gas capture. By capturing flare gas, Certarus will provide a regional supply of clean, cost-effective energy to help support corporate environmental, social and governance (ESG) best practices.
“We are seeing an increasing trend within completions to use electric hydraulic fracturing as a means of reducing carbon emissions and achieving cost savings. Certarus operates the largest bulk CNG trailer fleet in North America and is well-positioned to benefit from this trend. By sourcing CNG through flare gas capture, Certarus provides the industry with even more options to reduce carbon emissions,” Nathan Ough, vice president of Certarus, said.
Based on this strategic agreement, Certarus will displace a minimum of 5.5 million gallons (20 million liters) of diesel fuel with clean-burning CNG with the option for the Supermajor to expand up to 37.8 million gallons (143 million liters) during the term.
The corporation has invested significant resources to build-out a reliable compressed natural gas platform to supply both dual fuel and electric hydraulic fracturing operations. Energy companies across North America, including Exxon (via its XTO subsidiary), Diamondback, Shell, EOG Resources, Devon, CNX Resources, and Apache have entered into contracts for electric hydraulic fleets, in some cases with terms up to four years.
Certarus expects to commence CNG supply to Supermajor in fourth-quarter 2019 in parallel with a larger audience of end-users converting to compressed natural gas.
The three-year agreement, which includes options to extend, is estimated to be worth up to US$95 million over the term.
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