Commonwealth LNG Terminal
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Commonwealth LNG Terminal is a proposed LNG terminal in Cameron Parish, Louisiana, United States.
Location
Project details
- Owner: Commonwealth LNG, LLC
- Parent: Commonwealth LNG, LLC (10%), Kimmeridge (90%)[1]
- Location: Cameron Parish, Louisiana, United States
- Coordinates: 29.764163, -93.348066 (approximate)
- Capacity: 9.3 mtpa[2]
- Formerly 8.4 million tonnes per year (mtpa)[3]
- Cost: US$4 billion[4]
- Formerly US$4.8 billion[5]
- Financing: Sumitomo Mitsui Banking Corporation is the project's Financial Advisor[6], investment from Kimmeridge Energy Management Company, LLC[7]
- Status: Proposed
- FID Status: Pre-FID (H1 2025)[8]
- Type: Export
- Trains: 6
- Start year: 2027[9]
Background
Commonwealth LNG Terminal is a proposed LNG terminal in Louisiana, United States.[12] It will have six production trains,[13] and a total capacity of 8.4 million tonnes per year.[14] Project costs are estimated to be US$4.8 billion.[5]
The Office of Fossil Energy granted Commonwealth LNG long-term authorization to export LNG to Free Trade Agreement (FTA) countries in December of 2012.[15] Commonwealth LNG announced in April 2017 an expected commercial operation start date by the second quarter of 2022, representing a delay from the previously-expected operation date of fourth quarter 2021.[16] In January 2018, Sumitomo Mitsui Banking Corporation was appointed as the project's financial advisor by Commonwealth LNG.[6]
In September of 2019, the Federal Energy Regulatory Commission (FERC) formally accepted Commonwealth LNG’s filing application.[17] However, in March 2020 FERC announced that it was suspending the environmental review for Commonwealth LNG due to delays in receiving key data from Commonwealth LNG.[18] FERC is not expected to make a permit decision until the first quarter of 2021. The company expects to make a final investment decision (FID) shortly after, and deliver its first shipments of LNG in the second quarter of 2024.[19]
In April 2020, the energy and shipping brokerage Poten & Partners disclosed that the FID for the terminal had been delayed beyond the original FID timing of the second quarter of 2021. It cited COVID-19, plunging demand and the crash in oil prices as the reasons for the delay. [20]
Commonwealth tendered the project for terminal supplies in January 2021 and expects to select bidders by the end of June 2021.[21]
As of June 2021, the results of the tendering process had not been announced. Construction of the terminal is still targeted to begin in the first quarter of 2022, though a further regulatory issue is believed to be causing delays. A filing by the National Marine Fisheries Service (NMFS) to FERC pointed out that an assessment which addresses the project's potential impacts to essential fish habitat is incomplete. NMFS also said that the project's main permitting review has been paused for more than a year due to the delay in the availability of a draft Environmental Impact Statement (EIS) – federal agencies' authorizations are dependent on an EIS.[22] In Aug. 2021 Commonwealth LNG asked FERC to reject calls to invalidate the plant's license on the grounds that no new evidence had been introduced since the license was granted in 2019.[23]
In October 2021, the CEO of Commonwealth LNG, Paul Varello, said that FID for the terminal was projected for early 2023 owing to delays with the project receiving a permit certificate from FERC. The permitting from FERC was now anticipated by late 2022.[24]
In September 2022, a FERC study found that the project would result in “disproportionately high and adverse” impacts for nearby environmental justice communities.[25] Regardless, FERC approved the project in November 2022.[26]
In May 2023, Commonwealth LNG said that it expected to receive its first US export permit by June.[27]
A June 2023 article from Natural Gas Intelligence said that Commonwealth was in the final stages of commercialization, and that the sponsors anticipated taking FID this year.[28]
In February 2024, LNG Prime reported that Commonwealth LNG had pushed its anticipated FID date from 2024 to the first half of 2025. A spokesperson attributed the delay to the Biden Administration's pause on non-FTA export approvals for proposed LNG projects.[8]
Contracts
In June of 2019, Commonwealth Projects and Gunvor Group Ltd signed a heads of agreement (HOA), which finalized a definitive 15-year liquefied natural gas (LNG) sale-and-purchase agreement (SPA) for 1.5 million tonnes per annum of LNG offtake from the Commonwealth LNG terminal.[29]
In November of 2019, Commonwealth LNG, LLC announced a deal with Gunvor, in which Gunvor will take 3 million metric tons of production from the plant and help Commonwealth LNG land contracts to sell the rest of the facility's production on the global market.[19]
In August 2021, Commonwealth CEO Paul Varello said that the company signed a preliminary agreement with Bangladesh's Summit Oil & Shipping to potentially contract for up to 1 million tonnes per annum of LNG from its proposed facility, though that offtake deal had still to be finalized. Varello also spoke of having made "substantial progress" on other contract agreements which were in the final stages of negotiation. These contracts represent more than half of Commonwealth's 7 million to 7.5 million tonnes per annum capacity target which it needs to secure before being able to sanction the project by taking FID.[24]
In January 2022, Australian firm Woodside Energy signed a Heads of Agreement with Commonwealth LNG to negotiate a sale and purchase agreement for the supply of 2 Mtpa of LNG over a period of 20 years, scheduled to begin in the second quarter of 2026.[30]
In September 2022, Woodside Energy and Commonwealth LNG solidified the commitments under the heads of agreement by agreeing to two sales and purchase agreements for up to 2.5 mtpa LNG over 20 years.[31]
In September 2023, Commonwealth LNG signed a non-binding Heads of Agreement (HOA) with Switzerland's MET Group for the purchase of 1 mtpa LNG over 20 years.[32] The same month, Commonwealth signed an HOA with EQT Corporation for it to liquefy 1 mtpa LNG at the facility under a 15-year tolling agreement.[33]
In June 2024, Kimmeridge agreed in principle to a 20-year, 2-mtpa LNG offtake agreement with Commonwealth LNG as part of its new equity deal.[34]
Financing
In August 2023, Commonwealth announced that it had closed an investment of development capital from Kimmeridge Energy Management Company, LLC, alongside an agreement, in principle, under which Kimmeridge would purchase 2 mtpa LNG over 20 years.[7]
In an interview with S&P Global, Commonwealth LNG chairman Paul Varello said FID is intended for Q1 2024. The first two trains were slated to come online in Q1 2027, with the remaining four trains throughout the rest of that year.[9]
In June 2024, Kimmeridge took at 90% stake in Commonwealth LNG.[1]
Carbon Capture and Storage
In November 2023, Commonwealth announced it had entered a memorandum of understanding (MOU) with OnStream CO2 LLC, a joint venture between Carbonvert Inc. and Castex Carbon Solutions, LLC, to develop carbon capture and storage (CCS) along with its Commonwealth LNG Terminal facility. The CCS project will be owned and operated by OnStream CO2 LLC and would take captured CO2 from Commonwealth LNG for 20 years under the agreement[35].
Opposition
In a public letter filed with FERC in December of 2019, the Audubon Society of Louisiana wrote that the terminal could destroy habitat for the eastern black rail, a rare marsh bird that is expected to be added to the endangered species list in 2020.[36]
Articles and resources
References
- ↑ 1.0 1.1 Staff, LNG Prime (2024-06-26). "Kimmeridge takes 90 percent stake in Commonwealth LNG". LNG Prime. Retrieved 2024-07-03.
- ↑ Commonwealth LNG. Commonwealth LNG. Accessed August 2023.
- ↑ Commonwealth LNG and Gunvor Singapore Pte Ltd Sign Heads of Agreement Yahoo Finance, June 12, 2019
- ↑ Boone, Timothy (2023-08-14). "Commonwealth LNG closes on financing for Cameron facility". The Advocate. Retrieved 2024-05-22.
- ↑ 5.0 5.1 Paul Corey, "Commonwealth LNG touts modular approach, second-mover advantage", S&P Global, Oct. 29, 2019
- ↑ 6.0 6.1 "Commonwealth LNG selects SBMC as financial advisor", Offshore Energy, Jan. 4, 2018
- ↑ 7.0 7.1 Cision PR Newswire. Commonwealth LNG closes on investment and agrees to terms for strategic partnership. August 14, 2023.
- ↑ 8.0 8.1 Staff, LNG Prime (2024-02-29). "Commonwealth LNG pushes back FID to H1 2025". LNG Prime. Retrieved 2024-05-22.
- ↑ 9.0 9.1 9.2 9.3 9.4 "https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/lng/091823-interview-us-commonwealth-lng-in-talks-to-contract-2-mil-mtyr-from-louisiana-project".
{{cite web}}: External link in|title= - ↑ LNG Prime Staff (2023-08-15). "Commonwealth LNG inks deal with Kimmeridge, eyes FID in Q1 2024". LNG Prime. Retrieved 2023-10-12.
- ↑ Sergio Chapa, Commonwealth LNG lands supply deal for one-third of proposed production Chron, November 25, 2019
- ↑ North American LNG Export Terminals: Proposed Federal Energy Regulatory Commission, 1 May 2017
- ↑ TechnipFMC selected for Commonwealth LNG project World Oil, October 16, 2018
- ↑ Commonwealth LNG and Gunvor Singapore Pte Ltd Sign Heads of Agreement Yahoo Finance, June 12, 2019
- ↑ Commonwealth LNG, LLC (formerly Waller LNG Services, d/b/a Waller Point LNG) - FE dkt. No 12-152-LNG,Department of Fossil Energy, accessed 21 May 2017
- ↑ Three US-based LNG terminal projects report delays to operational start dates Platts, 7 April 2017
- ↑ FERC Accepts Commonwealth LNG’s Permit Application Business Wire, September 3, 2019
- ↑ David Rowlands, FERC suspends environmental review for Commonwealth LNG LNG Industry, March 18, 2020
- ↑ 19.0 19.1 Sergio Chapa, Commonwealth LNG lands supply deal for one-third of proposed production Chron, November 25, 2019
- ↑ John Snyder, FID's delayed by global uncertainty, Riviera Maritime Media, Apr. 24, 2020
- ↑ LNG Project Tracker: Commercial talks pick up as field of developers shrinks, SP Global Platts, Apr. 5, 2021
- ↑ Harry Weber, Commonwealth LNG faces regulatory, commercial questions ahead of construction, S&P Global, Jun. 29, 2021
- ↑ Commonwealth fights back against LNG protesters, Industry Report, Aug. 24, 2021
- ↑ 24.0 24.1 Harry Weber, Commonwealth LNG in late-stage talks with customers for US project: CEO, S&P Global, Oct. 7, 2021
- ↑ "FERC staff raise environmental justice concerns in review of planned Louisiana LNG project". ieefa.org. Retrieved 2023-09-01.
- ↑ "U.S. energy regulators unanimously approve Commonwealth LNG terminal". Reuters. Retrieved 2023-09-01.
- ↑ "Commonwealth LNG expects first US export permit by June". Yahoo Finance. Retrieved 2023-09-01.
- ↑ Natural Gas Intelligence. Commonwealth LNG In Final Stretch of Commercialization, Anticipates FID This Year. June 7, 2023.
- ↑ Commonwealth LNG and Gunvor Singapore Pte Ltd Sign Heads of Agreement Yahoo Finance, June 12, 2019
- ↑ Woodside and Commonwealth LNG sign HOA for LNG supply, Woodside Energy media release, Jan. 19, 2021
- ↑ LNG Prime Staff (2022-09-05). "Woodside, Commonwealth LNG finalize US supply deal". LNG Prime. Retrieved 2022-09-06.
- ↑ LNG Prime Staff (2023-09-04). "Commonwealth inks non-binding LNG supply deal with MET". LNG Prime. Retrieved 2023-09-06.
- ↑ LNG Prime Staff (2023-09-19). "Commonwealth LNG pens preliminary deal with EQT". LNG Prime. Retrieved 2023-10-05.
- ↑ Staff, LNG Prime (2024-06-26). "Kimmeridge takes 90 percent stake in Commonwealth LNG". LNG Prime. Retrieved 2024-07-03.
- ↑ LNG, Commonwealth. "Commonwealth LNG Signs Carbon Capture and Storage MOU With OnStream CO2". www.prnewswire.com. Retrieved 2024-05-22.
- ↑ Sergio Chapa, Audubon: Commonwealth LNG could destroy habitat of rare, elusive marsh bird Chron, December 3, 2019
