Commonwealth LNG Signs Agreement to Provide LNG to EQT

Commonwealth LNG said it entered into a liquefied natural gas (LNG) sale and purchase agreement (SPA) with EQT Corporation.

The agreement provides for the sale of 1 million metric tons per annum (mtpa) of LNG for 20 years from Commonwealth’s 9.5 mtpa export facility currently under development on the Gulf Coast in Cameron Parish, Louisiana, the company said in a news release.

Under the terms of the agreement, EQT will purchase LNG on a free-on-board basis at a price indexed to Henry Hub, according to the release.

Financial terms of the agreement were not disclosed.

The definitive agreement “marks a significant milestone in both companies’ efforts to deliver responsibly sourced, low emission natural gas to international markets,” Commonwealth said.

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

“The agreement with EQT is a strong endorsement of our integrated natural gas platform, featuring a unique wellhead-to-water strategy that meets burgeoning demand for LNG across global markets, while advancing U.S. energy leadership and economic growth,” Ben Dell, managing partner of Kimmeridge and chairman of Caturus, the parent company of Commonwealth LNG, said. “By combining EQT’s scale and Commonwealth’s efficient modular LNG design, we’re delivering a differentiated solution for global energy buyers”.

“The signing of this agreement with Commonwealth LNG adds to the incredible momentum we are building in the LNG market and further strengthens EQT’s position as a leading force in connecting U.S. natural gas to global demand,” EQT President and CEO Toby Rice said.

Commonwealth, a project of Kimmeridge Energy Management Co LLC in Louisiana, said it is advancing toward a final investment decision (FID) in 2025, with first LNG production expected in 2029.

Including the agreement with EQT, Commonwealth said it has 5 mtpa of offtake under long-term, binding agreements with Glencore, JERA, and Petronas, “with line of sight to subscribe its remaining capacity”.

Last week, Commonwealth received its final non-free trade agreement (non-FTA) export authorization from the U.S. Department of Energy (DOE) for the Louisiana LNG export facility.

The final authorization “marks a significant regulatory achievement” for Commonwealth, following the DOE’s earlier conditional approval and the Federal Energy Regulatory Commission’s (FERC) recent issuance of a final order upholding Commonwealth’s approval to construct the export facility, the company said in an earlier statement.

Commonwealth said the phase 1 development of its project is expected to bring an investment of more than $11 billion to Louisiana and generate an estimated $3.5 billion in annual export revenue following completion.

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, the company added.

“Receiving our final non-FTA is a pivotal moment for Commonwealth,” Dell said. “It is also a critical endorsement of our integrated natural gas platform, featuring a unique wellhead-to-water strategy that will deliver responsibly sourced, low-emission fuel to domestic and international markets, all the while advancing U.S. energy leadership and economic growth”.

Kimmeridge, an alternative asset manager focused on the energy sector, said it formed Caturus, which aims to build “America’s leading integrated natural gas and LNG company to deliver responsibly sourced, low-emission fuel to domestic and international markets”. The platform comprises Caturus Energy, formerly Kimmeridge Texas Gas, an upstream producer with capacity of 600 million cubic feet equivalent per day across 200,000 acres in Texas, and Commonwealth LNG.

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