Commonwealth LNG is a project proposed for Louisiana. It was originally supposed to be up and running by 2027 is expected to take until 2031 in order to be completed. The company behind the Commonwealth LNG Facility in Louisiana has warned in a request for an extension to its deadline.
Additionally, company blamed the temporary ban on new liquefied natural gas capacity that the the former US president Biden administration imposed. The administration imposed the ban on the industry in its final year. This followed a report that was drafted by an environmentalist that claimed LNG to more harmful than coal for the atmosphere.
Commonwealth LNG Facility in Louisiana Factsheet
Project owner: Commonwealth LNG
Location: West bank of the Calcasieu Ship Channel, near Cameron Parish, Louisiana, U.S. Gulf Coast.
Capacity: approximately 9.5 Million Tonnes Per Annum (MTPA) of LNG.
Estimated cost: Approximately $4 billion.
Key partners: Technip Energies (EPC Contractor), Baker Hughes (Refrigerant Compressors), Kimmeridge, Mubadala Energy (Equity Stake).
However, the Trump administration canceled the ban this year but that was not soon enough for Commonwealth LNG. The company said this in its letter to the Federal Energy Regulatory Commission.
Challenges the Project Faced
“These delays on the LNG project were beyond the control of Commonwealth. Also, they unavoidably affected Commonwealth’s ability to advance the Project on the schedule that was contemplated when its application was filed,” the company stated, as quoted by Reuters.
The Commonwealth LNG facility is located in Cameron Parish, Louisiana. Furthermore, it will have an annual capacity of 9.5 million tons of liquefied gas. The construction of the first phase of the project is expected to cost $11 billion. This is according to Commonwealth LNG and generate annual export revenues of approximately $3.5 billion.
However, the company has yet to make the final investment decision on the project. This was revealed by the company in September after it secured its export license from the Department of Energy.
Companies that will be Supplied with LNG from the Facility
Additionally, in September, Commonwealth LNG secured a long-term supply deal with EQT for 1 million tons of LNG from its future Louisiana plant. This brings the total volume committed to future deliveries to 5 million tons under deals with Japan’s JERA, Malaysian Petronas, and Glencore, in addition to EQT. Therefore, this leaves 4.5 million tons yet to be contracted to secure the viability of the project unless project developer Kimmeridge sticks to its commitment to offtake 2 million tons of LNG annually from the facility.
Similar LNG Projects in Louisiana
Another LNG project that is set for Louisiana is the Monkey Island LNG project. These projects are part of the major build-out of U.S. liquefied natural gas (LNG) export capacity.
