As energy market shifts, Commonwealth tries new bid process for La. LNG facility

Commonwealth LNG LLC is experimenting with a new system for soliciting bids to reserve offtake from a planned LNG facility, saying the pandemic has caused changes in the energy market that warrant a different approach.

Commonwealth will accept competitive bids for the 8.4 million tonnes per year facility in Cameron, La., that will allow prospective customers to secure future term supply at volumes, pricing and durations of their choosing. The company said in a Jan. 18 news release that it will be the first such tender process.

LNG will be made available under tolling, free on board or delivered at place offtake agreements to match customer preferences.

Independent global LNG trader Gunvor Group Ltd. is helping Commonwealth secure binding agreements for the facility and has committed to take up to 3 Mt/y of LNG offtake from the project. Commonwealth said using Gunvor's LNG portfolio will enable firm LNG supply obligations, which will minimize greenfield project supply risk and allow deliveries of LNG prior to the startup of the Commonwealth LNG project to buyers who need earlier supplies.

Commonwealth retained Poten & Partners Inc. to manage the tender process, which launched Jan. 18. Contracts are due to be awarded by June.

The project is expected to reach the final investment decision in the first quarter of 2022, with the first cargo anticipated in the second quarter of 2025.