Privately held Commonwealth LNG LLC filed with U.S. regulators a formal application for a permit to build an 8.4-million-tonnes-per-annum LNG export terminal and affiliated feedgas pipeline interconnect in Cameron Parish, La.
The project is among a dozen or so natural gas liquefaction terminals that are actively being pursued in the U.S. If the terminals become reality, they will come online during the early to middle part of the next decade, a time when global supply could face a shortage based on forecast demand.
There is uncertainty in the market about the number and ultimate size of projects that will make it to the finish line, given the construction costs, the competition for buyers and, more recently, the impact from the trade war between the U.S., the biggest supplier of new capacity, and China, which is expected to be the world's biggest importer of LNG within a decade.
Commonwealth LNG has been in the prefiling process with the Federal Energy Regulatory Commission since 2017. Its Aug. 20 formal application with FERC asked for approval of a Natural Gas Act certificate by January 2021 so that it can begin commercial exports by the first quarter of 2024.
Houston-based Commonwealth, a subsidiary of an investment vehicle owned by businessman Paul Varello, proposed a six-train facility, with each unit capable of producing 1.4 mtpa of LNG. Total capacity could be increased to 9.5 mtpa under optimal conditions, the application said. The project would also include six LNG storage tanks and a 3-mile-long, 30-inch diameter natural gas pipeline that will connect the facility with pipeline systems operated by Kinetica Partners LLC and EnLink Bridgeline Holdings.
Commonwealth expected to build significant portions of the trains and storage tanks off-site in modular fashion. This approach is becoming more common among second-wave U.S. developers to shorten construction time, cut costs and find suitable off-takers. (FERC docket CP19-502)
In June, Commonwealth said it had signed a heads of agreement with a subsidiary of global commodity trader Gunvor Group Ltd. that anticipated the negotiation and finalization of a definitive 15-year sale-and-purchase agreement for 1.5 mtpa of LNG off-take. Commonwealth said at the time that it expected to take a final investment decision on the project in 2020.
Existing and proposed LNG export terminals have been sited in Cameron Parish and nearby parishes in southwestern Louisiana. Among them is Venture Global LNG's Calcasieu Pass project, which has its FERC permit and began site construction in February.
Harry Weber is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.
