Offtake deal locked in ahead of US LNG terminal’s FID

U.S.-based Commonwealth LNG and Kimmeridge Texas Gas (KTG), affiliates of the energy-focused alternative investment manager Kimmeridge, have inked binding agreements with Swiss-headquartered Glencore for the supply of liquefied natural gas (LNG) from an export facility under development in Louisiana.

Under the deals, Glencore will purchase 2 million tonnes per annum (mtpa) of LNG for 20 years from the future Commonwealth LNG project, as well as equivalent natural gas supply from Kimmeridge under a netback agreement at international prices.

This represents the formalization of an earlier heads of terms (HoT) agreement the partners inked in September 2024.

Ben Dell, Managing Partner of Kimmeridge and Chairman of Commonwealth, said: “Following from the initial partnership announcement with Glencore last year, this critical milestone furthers our commitment to developing a state-of-the-art LNG export facility that will prioritize environmental stewardship and create lasting value for local communities. We are pleased with our progress and look forward to hitting the key targets on our commercialization timeline.”

The binding agreements follow the deal with an undisclosed buyer, described as a major Asian energy company, to buy 1 million tons per annum (mtpa) of LNG for 20 years, announced earlier this month.

According to Commonwealth LNG, 3 mtpa of offtake has now been booked under long-term agreements. The final investment decision for the project and the start of construction are planned for Q3 2025, with first LNG production to follow in Q1 2029.

David Lawler, KTG CEO, noted: “Our partnership with Glencore furthers the transformation of KTG into an integrated natural gas champion that provides reliable, clean energy from wellhead to water. We look forward to reaching critical international gas markets in partnership with Glencore.”

Glencore’s Global Head of LNG, Gas and Power, Maxim Kolupaev, believes the agreements with Kimmeridge Texas Gas and Commonwealth are important for advancing his company’s global gas strategy. Furthermore, the deals are said to be in line with Glencore’s commitment to a cleaner, more sustainable energy future.

The proposed 9.5 mtpa Commonwealth LNG liquefaction and export facility on the west bank of the Calcasieu Ship Channel, near Cameron, Louisiana, is set to have five 50,000-cubic-meter (cbm) storage tanks, accommodating vessels up to 216,000 cbm. 

Last month, UAE-headquartered Mubadala Energy inked an agreement to acquire a 24.1% interest in Kimmeridge’s SoTex HoldCo (SoTex). Described as the company’s first major investment in the U.S., the deal has enabled it to gain access to Kimmeridge Texas Gas and therefore Commonwealth LNG.