Commonwealth LNG signs 20-yr sale and purchase agreement with major Asian buyer
Commonwealth LNG has signed a sale and purchase agreement (SPA) with a major Asian energy company. Under the agreement, the buyer will purchase 1 metric MMtpy of LNG for 20 yr from Commonwealth's 9.5-MMtpy facility currently under development in Cameron, Louisiana (U.S.).
"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," said Ben Dell, Managing Partner of Kimmeridge and Chairman of Commonwealth. "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."
Commonwealth's Phase 1 development is expected to bring an investment of more than $11 B to Louisiana and generate an estimated $3.5 B in annual export revenue. 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.
This buyer is one of the world's leading energy corporations, operating comprehensively across the oil and gas value chain from upstream to downstream. In the liquefied natural gas (LNG) sector, this buyer is currently one of the largest global suppliers of LNG. Gas Processing & LNG reported last week on a potential buyer.
"We look forward to building and strengthening our partnership with this buyer in mutually beneficial ways as we progress on our journey," said Commonwealth President and CEO Farhad Ahrabi. "We're committed to building and creating a safe, reliable, efficient, and well-governed LNG operating company."
Commonwealth is owned by Kimmeridge SoTex Holdco LLC, which was founded by Kimmeridge, an asset manager focused on the energy sector. Through SoTex, which also holds an upstream natural gas development company called Kimmeridge Texas Gas, Kimmeridge is building America's first integrated gas independent to deliver low-cost natural gas from wellhead-to-water and meet burgeoning demand for responsibly-produced LNG across global markets.
The SPA will become fully effective upon the satisfaction of customary conditions, including an affirmative final investment decision on the project.
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