Commonwealth LNG Gets Final Export Permit

The Department of Energy (DOE) has granted Commonwealth LNG, a project of Kimmeridge Energy Management Co. LLC in Louisiana, complete authorization to export to countries without a free trade agreement (FTA) with the United States, Commonwealth said Wednesday.

“Commonwealth anticipates reaching a final investment decision in the third quarter of this year with first LNG production expected in 2029”, Commonwealth said in an online statement.

“The Commonwealth LNG project is proceeding with significant momentum from recently announced long-term binding LNG offtake agreements with top-tier global purchasers, including Glencore, JERA  and PETRONAS, and line of sight toward finalizing its commercial book in the near term”, Commonwealth added. The offtake agreements involve four million metric tons per annum (MMtpa).

Commonwealth is permitted to export up to 9.5 MMtpa, equivalent to about 441.4 billion cubic feet (Bcf) a year or 1.21 Bcf per day, to both FTA and non-FTA countries. The DOE granted the FTA portion of the permit April 2020 for a 25-year term. The non-FTA permit lasts through December 2050.

“Commonwealth is pioneering an integrated wellhead-to-water strategy in partnership with its upstream operating entity to deliver low-cost, low-emission gas to the global market which is seeking supply from trusted trading partners”, Commonwealth said.

“The Commonwealth export facility is expected to unlock approximately $11 billion in investments in Louisiana and an estimated $3.5 billion in annual export revenue, unleashing American energy, utilizing approximately 2,000 workers at the peak of construction and providing 270 high-paying jobs when the facility begins operations”, it claimed.

In February the DOE granted the project a conditional non-FTA permit. A final permit was withheld pending a DOE review of permitting considerations concerning greenhouse gas emissions, environmental impact, energy prices and domestic gas supply.

On May 19 the DOE announced it would proceed with issuing final orders on pending applications to export LNG to non-FTA nations after concluding the public comment period for the review initiated by the previous administration. The DOE under President Donald Trump resolved that based on the findings, LNG exportation is in the American public interest, despite an opposing interpretation by the department’s leadership under then-President Joe Biden.

“Based on the record evidence from the 2024 LNG Export Study and the public comments received, DOE makes several key findings, including: the United States has a robust natural gas supply that is sufficient to meet growing levels of exports while minimizing impacts to domestic prices; growing LNG exports increases our gross domestic product and expands jobs while improving our trade balance; and increasing U.S. LNG exports enhances domestic and international global security with no discernable impact to global greenhouse gas emissions”, the DOE said.

On May 29 the DOE resumed export permit decisions with a positive order for Port Arthur LNG, a Sempra project in Texas.

“This is the first final LNG export approval under President Trump’s leadership and marks another step in restoring regular order to LNG export permitting – reversing the previous administration’s pause and delivering on the President’s pledge to unleash American energy”, the DOE said.

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