Commonwealth LNG Inks 20-Year Offtake

Commonwealth LNG has roped in an unnamed “major” Asian customer with the signing of a deal for the supply of 1 million metric tons per annum for 20 years.

“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”, Ben Dell, managing partner of project owner Kimmeridge, said in an online statement. “We look forward to working with this Buyer, a longstanding leader in LNG, as we further our integrated wellhead-to-water strategy in delivering LNG to critical markets around the world”.

“This Buyer is one of the world’s leading energy corporations, operating comprehensively across the oil and gas value chain from upstream to downstream”, added the statement by Kimmeridge and Commonwealth. “In the liquefied natural gas (LNG) sector, this Buyer is currently one of the largest global suppliers of LNG”.

Located along the Calcasieu River on the Gulf Coast near Cameron, Louisiana, the project has a planned capacity of 9.5 MMtpa, equivalent to about 441.4 billion cubic feet per year of natural gas according to Commonwealth.

“Commonwealth’s phase 1 development is expected to bring an investment of more than $11 billion to Louisiana and generate an estimated $3.5 billion in annual export revenue”, the statement added. “The project is expected to employ approximately 2,000 workers at the peak of construction and provide approximately 275 high-paying jobs when the facility begins operations in late 2029”.

In February the Department of Energy (DOE) granted the project a conditional permit to export to countries with no free trade agreement (FTA) with the United States.

This was the first LNG-related order issued by the DOE under Donald Trump’s second non-consecutive administration, which immediately ended ex-President Joe Biden’s pause of pending decisions on LNG export to countries with no FTA with the U.S.

Concurrently the Federal Energy Regulatory Commission (FERC) issued a draft Supplemental Environmental Impact Statement (SEIS) to resolve a court challenge against the project.

“With these decisions in hand, subject to a FERC Final Order, which we expect in July 2025, and DOE final authorization, Commonwealth anticipates reaching a final investment decision in September 2025, with first LNG production expected in Q1 [first quarter] 2029”, Commonwealth chief executive Farhad Ahrabi said in an online statement February 14, 2025.

FERC opened a public comment period for the draft SEIS, prepared in response to a ruling by the Court of Appeals for the District of Columbia Circuit that the Commission had failed to properly assess the cumulative effects of the project’s nitrogen dioxide (NO2) emissions. The comment window was to close April 7, 2025.

“Commission staff conclude that cumulative modeled National Ambient Air Quality Standards exceedances for 1-hour NO2 may be significant”, FERC said.

To contact the author, email jov.onsat@rigzone.com

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.