Louisiana’s LNG export terminal changing hands but FID still on track for next year

Kimmeridge Texas Gas (KTG), an affiliate of the U.S.-based energy-focused alternative investment manager Kimmeridge, has got its hands on the biggest stake in a proposed 9.5 million tons per annum (mtpa) liquefied natural gas (LNG) export terminal project on the west bank of the Calcasieu Ship Channel at the mouth of the Gulf of Mexico near Cameron, Louisiana.

While disclosing the appointment of David Lawler as Chief Executive Officer (CEO), who will advance KTG’s efforts to become a fully integrated provider of LNG from well-head to water in a bid to provide reliable, secure, and clean energy to global markets, Kimmeridge also confirmed the closing of a follow-on control investment in Commonwealth LNG, which is expected to accelerate the firm’s growth trajectory.

Ben Dell, Managing Partner of Kimmeridge and Director at KTG, commented: “We are excited to take a controlling interest in Commonwealth LNG as we integrate our business from well-head to water, and look forward to the completion of a best-in-class LNG export facility in Louisiana.”

This funding will not only push Kimmeridge’s equity ownership in the Commonwealth LNG to more than  90% but also support the 9.5 mtpa LNG export facility in Louisiana through an anticipated final investment decision (FID) in the first half of 2025.

Farhad Ahrabi, Commonwealth CEO and President, remarked: “We are delighted to integrate into the Kimmeridge team as we work towards FID in 2025. Kimmeridge shares our vision of bringing a differentiated offering to the LNG market, and we look forward to commencing delivery to our customers in 2028.”

Moreover, Paul Varello, Commonwealth LNG Founder and Executive Chairman, has revealed his retirement, effective with the sale of his company to Kimmeridge, capping an energy sector career spanning more than five decades. 

“Commonwealth LNG has always focused on developing a project that brings exceptional value to the LNG industry,” said Varello.  “I’m proud that our team will now be part of Kimmeridge’s broader strategy to provide reliable and sustainable energy on a global basis.”

Several months ago, Commonwealth LNG inked a deal with EQT for 1 mtpa of LNG under a 15-year tolling agreement, and associated gas supply to Commonwealth LNG’s facility in Cameron, which followed a similar agreement with MET Group for the sale and purchase of 1 mtpa of LNG for 20 years from the Louisiana facility.

David Lawler, CEO of KTG, highlighted: “When produced responsibly, LNG is a reliable, easily accessible energy source. In the future, KTG will export clean energy across the world, helping economies accelerate their transition ambitions.”

With five 50,000 M3 storage tanks, the Commonwealth LNG facility is envisioned to accommodate vessels up to 216,000 M3. Gas supply will be enabled by a 3-mile pipeline interconnected to two major pipeline systems with significant excess transportation capacity.

The project, which received FERC authorization on November 17, 2022, will use a highly modularized approach to enable the construction of the facility with greater schedule and cost assurance, allowing LNG production to begin by the end of 2028.