Commonwealth LNG seals 20-year SPA with Asian buyer

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ENB Pub Note: This article from LNG Prime has some great information, and I added more specifications of the Commonwealth’s LNG export facility above. 

• Capacity: The terminal is designed to produce 8.4–9.5 million tonnes per annum (Mtpa) of LNG for export, equivalent to approximately 1.2–1.44 billion cubic feet per day (Bcf/d) of natural gas. The variation in reported capacity (8.4 Mtpa in some sources, 9.3–9.5 Mtpa in others) reflects different stages of project planning or updates.
• Location: Situated in south-central Cameron Parish, Louisiana, on a 118.8-acre site less than one mile from the Gulf of Mexico, the terminal benefits from proximity to maritime routes and existing pipeline infrastructure.
• Cost: Estimated at $4.8 billion for terminal development, with funding secured from Kimmeridge Energy Management, which acquired a controlling interest in June 2024.
• Ownership: Commonwealth LNG, LLC, a subsidiary of Commonwealth Projects, is the primary developer. Kimmeridge Energy Management holds a 90% stake, with plans to reduce to 51% post-final investment decision (FID).

• Liquefaction Trains: Six modular liquefaction trains, each with a capacity of 1.4 Mtpa, using Baker Hughes’ LM9000 aero-derivative gas turbine technology for efficient production.
• Storage Tanks: Six modular LNG storage tanks, each with a capacity of 50,000 cubic meters (total working storage of 300,000 m³), designed by Arup. Tanks are 167 ft tall and 149 ft in diameter, with inner and outer walls for safety.
• Marine Facilities: A single-vessel LNG carrier berth accommodating ships from 10,000 to 216,000 m³, utilizing an existing turning basin from the Calcasieu Pass LNG project. Includes a barge dock, off-loading platform, and a 100 ft x 90 ft chip slip.
• Power Supply: A 120 MW natural gas-fired simple cycle power plant on-site, with two diesel generators and a battery backup system for reliability.
• Other Facilities: Two flare systems for venting excess gas, gas pre-treatment trains, and appurtenant facilities like a metering station with gas separators, custody transfer meters, and emergency shutdown valves.

• Length and Size: A 3–3.04-mile, 30–42-inch-diameter pipeline connecting the terminal to existing pipelines in Cameron Parish.
• Interconnections: Links to three pipelines—Bridgeline (dual 20-inch and 12-inch) and Kinetica (16-inch)—with a capacity to supply 1.44 Bcf/d of natural gas. Includes one new meter station.
• Purpose: Delivers feed gas to the terminal, leveraging excess transportation capacity in the region’s pipeline network.

• Pre-Filing and Permitting:
  • Pre-filing with the Federal Energy Regulatory Commission (FERC) began in July 2017, with a formal application filed on August 20, 2019 (Docket No. CP19-502-000), amended July 8, 2021.
  • FERC issued a final Environmental Impact Statement (EIS) in September 2022 and approved the project on November 17, 2022. However, a federal appeals court ordered further analysis of nitrogen dioxide (NO2) emissions, leading to a draft supplemental EIS issued on February 14, 2025, with public comments due by April 7, 2025.
  • The U.S. Department of Energy (DOE) granted export authorization to non-Free Trade Agreement (FTA) countries on February 13, 2025, the first such approval after the Biden administration’s LNG export permit pause was lifted by President Trump. A final DOE order is expected later in 2025.
• Final Investment Decision (FID):
  • Initially targeted for Q3 2023, FID was delayed due to COVID-19, oil price crashes, and regulatory hurdles, including the Biden administration’s 2024 LNG export pause.
  • Current guidance points to FID in September 2025, subject to FERC’s final order expected in July 2025.
• Construction and Operations:
  • Construction is slated to begin post-FID, using a modular approach to complete the facility in 36 months.
  • Commercial operations are projected to start in Q1 2029 (earlier estimates of 2024–2027 were overly optimistic). The terminal will export LNG on an average of 156 LNG carriers per year.

• Woodside Energy Trading (Singapore): Two binding SPAs for up to 2.5 Mtpa of LNG over 20 years, converted from an HOA in September 2022.
• MET Group (Switzerland): HOA for 1 Mtpa of LNG for 20 years, starting in 2027, pending a definitive SPA.
• Gunvor Group (Singapore): SPA for 1.5 Mtpa of LNG for 15 years, with Gunvor assisting in marketing additional capacity.
• Kimmeridge Energy: Preliminary agreement for 2 Mtpa of LNG offtake and associated gas supply over 20 years.
• EQT: HOA for 1 Mtpa of LNG under a 15-year tolling agreement, announced in September 2023.
• Summit Oil and Shipping (Bangladesh): MOU for up to 1 Mtpa of LNG for 20 years to supply Asia, signed in August 2021.
• Major Asian Buyer: A 20-year SPA for 1 Mtpa of LNG, announced in May 2025, though the buyer’s identity was not disclosed.
• Petronas (Malaysia): In talks for potential LNG purchases, reflecting increased buyer interest post-export license approval.

• Modular Construction: The project employs a fully modular design for liquefaction trains, storage tanks, and auxiliary equipment, reducing onsite labor to an average of 800 workers per month and a peak of 2,000, compared to 8,000–10,000 for traditional field-built projects. This approach, supported by Technip Energies, minimizes local resource strain and accelerates construction.
• Cost Efficiency: By fabricating major components offsite, Commonwealth aims to lower capital costs and offer competitive LNG pricing under flexible contract terms.
• Carbon Capture and Storage (CCS): In November 2023, Commonwealth signed an MOU with OnStream CO2 LLC to develop CCS, capturing CO2 from the terminal for 20 years, aligning with sustainability goals.
• Community Initiatives: Commonwealth has launched healthcare and education programs in Southwest Louisiana and sponsors local events like the Louisiana Fur & Wildlife Festival.

• Leadership Team:
  • Farhad Ahrabi (CEO): Oversaw development of Cameron LNG (14.5 Mtpa) and has 28 years of LNG experience with BG Group. Holds a PhD in Reservoir Engineering.
  • Paul Varello (Founder and Executive Chairman): Over 50 years in engineering and construction.
  • Lisa Cummins Cohen (CFO): Joined in November 2024, with experience in multi-billion-dollar LNG project financing.
• Key Partners:
  • Technip Energies: Engineering, procurement, and construction (EPC) contract and FEED services.
  • Baker Hughes: Supplies LM9000 turbines and compressor technology.
  • Arup and Mammoet: Engineering and heavy hauling for modular tanks.
  • Financial Advisors: Sumitomo Mitsui Banking Corporation, King & Spalding, PwC, and K&L Gates.

• Environmental Impact:
  • The final EIS (September 2022) concluded that most environmental impacts would be reduced to less than significant levels with mitigation, but visual resources and environmental justice communities face significant adverse impacts. The draft supplemental EIS (February 2025) noted that NO2 emissions may have significant cumulative air quality impacts, though no new mitigation measures were recommended.
  • The Audubon Society of Louisiana raised concerns about habitat destruction for the eastern black rail, a rare marsh bird potentially listed as endangered.
  • The National Marine Fisheries Service noted incomplete assessments of impacts on essential fish habitats, contributing to permitting delays.
• Economic Benefits:
  • Expected to create 200 full-time jobs upon completion and reduce strain on local infrastructure during construction due to modularization.
  • Supports U.S. energy exports, with DOE citing economic benefits, global LNG supply diversification, and energy security for allies through 2050.
• Global Sustainability: Commonwealth claims LNG will displace coal and high-emitting fuels, advancing decarbonization, though this narrative overlooks methane leakage risks and long-term reliance on fossil fuels.

• Environmental Risks: Significant NO2 emissions and impacts on environmental justice communities raise concerns about air quality and equity. Methane leaks, a potent greenhouse gas, are a known issue in LNG projects but are underemphasized in project documents. The CCS initiative is promising but unproven at scale for this project.
• Regulatory Delays: Repeated FID postponements (from Q2 2021 to September 2025) reflect challenges with FERC permitting, environmental reviews, and market volatility (e.g., COVID-19, oil price crashes). The Biden administration’s 2024 LNG export pause, though lifted, highlights ongoing policy uncertainty.
• Economic Viability: The $4.8 billion cost and reliance on volatile global LNG demand pose financial risks. While modular construction reduces costs, the project’s profitability depends on securing long-term contracts in a competitive market.
• Local vs. Global Priorities: The focus on exports to Asia and Europe may prioritize foreign markets over domestic energy needs, despite claims of local job creation. The environmental justice impacts suggest marginalized communities bear disproportionate burdens..

Under the agreement, the unidentified buyer will purchase 1 million tonnes per annum (mtpa) of LNG for 20 years from Commonwealth’s planned facility, according to a statement by the LNG terminal developer.

Commonwealth said this buyer is “one of the world’s leading energy corporations, operating comprehensively across the oil and gas value chain from upstream to downstream.”

In the LNG sector, this buyer is currently “one of the largest global suppliers of LNG.”

Reuters recently reported, citing sources, that Malaysia’s Petronas was in talks with Commonwealth to buy LNG.

Commoweatlh said the SPA will become fully effective upon the satisfaction of customary conditions, including an affirmative final investment decision on the project.

“This offtake agreement marks another important milestone for Commonwealth as we work toward a final investment later this year and first offtake planned for 2029,” said Ben Dell, managing partner of Kimmeridge and chairman of Commonwealth.

In February, Commonwealth said it was targeting FID on its planned LNG facility in Cameron Parish in September of this year after it received a conditional non-FTA approval from the US DOE.

The LNG terminal developer also received its draft supplemental environmental impact statement (SEIS) from FERC.

FERC still needs to issue the final SEIS, which is expected in May, and the final order, which is expected in July.

However, Commonwealth is seeking expedited final approval from FERC.

UAE’s Mubadala will take a stake in Kimmeridge’s Commonwealth under a recently revealed deal.

Mubadala signed an agreement with Kimmeridge to acquire a 24.1 percent interest in the latter’s SoTex HoldCo via the issuance of new equity.

SoTex holds two portfolio companies: Kimmeridge Texas Gas, which operates an upstream unconventional gas business in the Eagle Ford in South Texas, and Commonwealth LNG.

In June 2024, Kimmeridge, via its affiliate KTG took a 90 percent stake in Commonwealth.

Before that, Commonwealth closed an investment of development capital from funds managed by Kimmeridge.

The two firms also agreed in principle on terms for a 20-year, 2 mtpa LNG offtake commitment from the facility along with the associated gas supply.

As per other deals, Switzerland-based energy trader Glencore entered into a long-term agreement with Commonwealth LNG in September last year.

Moreover, Commonwealth entered into a non-binding 20-year supply deal with Switzerland-based energy trader MET Group for 1 mtpa of LNG, and it also finalized a supply deal in 2022 with Australian LNG firm Woodside.

The deal is for the supply of up to 2.5 mtpa of LNG over 20 years to Woodside Energy Trading Singapore from Commonwealth’s LNG export facility.

Commonwealth is planning to build the six-train liquefaction and export facility on the west bank of the Calcasieu Ship Channel at the mouth of the Gulf of Mexico near Cameron.

The facility includes six 50,000-cbm LNG storage tanks, one jetty with the capacity to service vessels from 10,000 cbm to 216,000 cbm, and a pipeline.

The post Commonwealth LNG seals 20-year SPA with Asian buyer appeared first on Energy News Beat.

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