Kimmeridge Texas Gas Secures Major LNG Sale and Purchase Agreement
Kimmeridge Texas Gas (KTG), an affiliate of the energy-focused alternative investment manager Kimmeridge, has recently announced a significant milestone in its LNG export terminal development project. The company has secured a multi-year liquefied natural gas (LNG) sale and purchase agreement (SPA) with a major Asian energy company.
The agreement entails the purchase of 1 million tons per annum (mtpa) of LNG for a duration of 20 years from Commonwealth LNG’s facility in Cameron, Louisiana. This partnership underscores Kimmeridge’s commitment to delivering LNG to global markets and marks a crucial step towards the completion of the project.
Key Highlights of the Agreement
The undisclosed buyer, a prominent player in the LNG industry, will source LNG from Commonwealth LNG’s 9.5 mtpa facility in Cameron, Louisiana. Ben Dell, Managing Partner of Kimmeridge and Chairman of Commonwealth, expressed optimism about the collaboration, stating, “This offtake agreement marks another important milestone for Commonwealth as we work towards a final investment later this year.”
Commonwealth’s Phase 1 development is poised to bring substantial investments to Louisiana, with an estimated $11 billion in capital expenditure and $3.5 billion in annual export revenue. The project is expected to create employment opportunities for around 2,000 workers during construction and provide 275 high-paying jobs upon commencement of operations in late 2029.
Driving Growth in the LNG Sector
Kimmeridge’s strategic focus on the LNG market aligns with the growing demand for responsibly produced LNG across the globe. Through its subsidiary, Kimmeridge Texas Gas, the company aims to establish an integrated gas independent that delivers low-cost natural gas from wellhead to water.
Farhad Ahrabi, Commonwealth President and CEO, emphasized the company’s commitment to operational excellence and partnership with the buyer. He stated, “We look forward to building and strengthening our partnership with this buyer in mutually beneficial ways as we progress on our journey.”
Future Prospects and Industry Impact
The SPA will come into effect upon meeting customary conditions, including a final investment decision for the project. Commonwealth LNG’s leadership team is dedicated to developing a world-class LNG facility by prioritizing risk management and cost efficiency.
With the Trump administration’s approval and the support of key stakeholders, Kimmeridge’s LNG export terminal project is poised to make a significant impact on the energy landscape. The company’s innovative approach to LNG production underscores its commitment to sustainability and growth in the LNG sector.