Commonwealth LNG, a project of Kimmeridge Energy Management Co. LLC in Louisiana, has secured authorization from the Department of Energy (DOE) to export to countries with no free trade agreement (FTA) with the United States.
The project in Cameron Parish is now permitted to ship up to 9.5 million metric tons a year of liquefied natural gas, equivalent to around 1.21 billion cubic feet per day (Bcfd) of gas according to Kimmeridge, to FTA and non-FTA nations on a non-additive basis until 2050. The DOE granted the FTA portion of the permit April 2020.
“[T]his final order brings DOE’s cumulative total of approved non-FTA exports of LNG from the lower-48 states to 52.81 Bcfd of natural gas (across one conditional order and 41 final orders, including this order)”, stated the order, published on DOE’s website.
In February 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 U.S. gas supply.
In May 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.
In June the Federal Energy Regulatory Commission upheld its approval for the siting, construction and operation of Commonwealth LNG.
“As DOE found earlier this year and affirms again in this order, expanding America’s LNG export capacity bolsters our economy, strengthens the energy security of our allies and trading partners and ensures the U.S. can continue to lead the world in the production of affordable, reliable and secure energy”, Energy Secretary Chris Wright said of the final non-FTA permit for the project.
The DOE noted Commonwealth LNG “has secured long-term off-take agreements for LNG with Malaysia’s PETRONAS, global energy commodities trading entity Glencore Ltd. and Japan’s JERA”.
Earlier this month Commonwealth LNG said it had awarded an engineering, procurement and construction contract to Technip Energies NV.
Commonwealth LNG expects to make a FID (final investment decision) by year-end and start operation 2029.
Also this month Emirati sovereign fund Mubadala Investment Co. completed a transaction that gave it a minority stake in Commonwealth LNG by acquiring a 24.1 percent ownership in Kimmeridge’s SoTex HoldCo LLC. SoTex’s business consists of an upstream unconventional gas position in the Eagle Ford in South Texas, held via Kimmeridge Texas Gas, and Commonwealth LNG.
SoTex has now rebranded to Caturus. “Caturus is building the only independent, fully integrated natural gas and LNG export platform in the U.S. through a combination of its upstream operations under Caturus Energy, formerly Kimmeridge Texas Gas, and via Commonwealth LNG”, a joint statement said August 7.
The purchase of the 24.1 percent stake, via the issuance of new equity, “marks Mubadala Energy’s U.S. market entry and reflects its ambitious expansion strategy”, the statement said.
To contact the author, email jov.onsat@rigzone.com
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