Kimmeridge takes 90 percent stake in Commonwealth LNG

US private equity firm Kimmeridge is taking a 90 percent stake in Commonwealth LNG, the developer of the 9.5 mtpa plant in Cameron, Louisiana founded by Paul Varello, who is retiring.

In August last year, Commonwealth LNG closed an investment of development capital from funds managed by Kimmeridge.

The two firms also agreed in principle on terms for a 20-year, 2 mtpa LNG offtake commitment from the facility along with the associated gas supply.

According to a statement released on Tuesday, Kimmeridge, via its affiliate Kimmeridge Texas Gas (KTG), closed a follow-on control investment in Commonwealth LNG.

Kimmeridge did not reveal the financial details of the transaction.

The funding will support the LNG export facility in Cameron through anticipated final investment decision (FID) in the first half of 2025, and will raise Kimmeridge’s equity ownership in Commonwealth LNG to over 90 percent, the statement said.

Deliveries from the LNG export facility are expected to start in 2028.

Kimmeridge also said that its unit KTG has appointed David Lawler as chief executive officer, effective immediately.

Lawler will advance KTG’s efforts to become a fully integrated provider of LNG from well-head to water, it said.

He brings more than 30 years of experience in the energy sector. Most recently, he served as chairman and president of BP America, Kimmeridge said.

DOE non-FTA permit

Earlier this year, Commonwealth LNG pushed back the decision form the first quarter of 2024 to the first half of 2025 due to the US DOE pause in permit reviews.

Commonwealth LNG received FERC authorization in November 2022, but DOE still needs to approve its non-FTA application. The NFTA approval is the only remaining permit required for the project.

The company’s plant in Cameron will use gas turbines and other equipment from energy services firm Baker Hughes as part of a deal announced in August 2023.

Moreover, Commonwealth LNG entered into a non-binding 20-year supply deal with Switzerland-based energy trader MET Group for 1 mtpa of LNG, and it also finalized a supply deal in 2022 with Australian LNG firm Woodside.

The deal is for the supply of up to 2.5 mtpa of LNG over 20 years to Woodside Energy Trading Singapore from Commonwealth’s LNG export facility.

Commonwealth LNG is planning to build the six-train liquefaction and export facility on the west bank of the Calcasieu Ship Channel at the mouth of the Gulf of Mexico near Cameron, Louisiana.

The facility includes six 50,000-cbm LNG storage tanks, one jetty with the capacity to service vessels from 10,000 cbm to 216,000 cbm, and a pipeline.

Paul Varello retires

Effective with the sale of his company to Kimmeridge, Commonwealth LNG founder and executive chairman Paul Varello has announced his retirement, Commonwealth LNG said in a separate statement.

Prior to establishing Commonwealth LNG in 2014, he was founder and chairman of Commonwealth Engineering and Construction, an engineering and project management company.

Commonwealth LNG CEO Farhad Ahrabi, who joined the company in 2022 following a seven-year tenure at Cameron LNG, will continue in his current role under Kimmeridge ownership, the statement said.

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