US LNG terminal developer Commonwealth LNG has entered into a non-binding heads of agreement with Switzerland-based energy trader MET Group to supply the latter with liquefied natural gas from the proposed 9.3 mtpa plant in Cameron, Louisiana.
Under the sale and purchase deal, Commonwealth will supply 1 million tonnes per annum of LNG for 20 years to MET.
Commonwealth said in a statement the terms anticipated under the non-binding HOA would begin at the start of commercial operation of its LNG export facility in 2027.
Final terms remain subject to negotiation of a definitive sale and purchase agreement (SPA) between the two firms, it said.
MET increasing LNG volumes
Commonwealth LNG founder and executive chairman, Paul Varello, said, “this agreement recognizes that US LNG can and will play a continuing role in Europe’s energy transition.”
MET’s chairman and CEO Benjamin Lakatos said in the statement that LNG supply into Europe “is a significant contributor to gas supply diversification and an important contributor to European energy security.”
“LNG is also becoming an important part of MET Group’s strategy going forward,” he said.
In 2022 alone, MET has imported more than 30 terawatt-hours (TWh) of LNG cargoes to countries including Croatia, Greece, Spain, Belgium, and the UK.
The company has capacity rights at the Croatian FSRU-based terminal and received the first LNG cargo via the Krk facility in the northern Adriatic Sea in April 2021.
This year, the company also secured long-term LNG capacities in Germany and expanded its spot capacity reach to Finland.
MET booked regasification capacities at the FSRU-based LNG import terminal in Germany’s Lubmin, owned by Deutsche ReGas.
FID in Q1 2024
Last month, Commonwealth LNG said it plans to take a final investment decision on its proposed plant in Louisiana in the first quarter of next year after it joined forces with US private equity firm Kimmeridge to build the facility.
Commonwealth LNG and Kimmeridge also agreed in principle on terms for a 20-year, 2 mtpa LNG offtake commitment from the facility along with the associated gas supply.
Last year, Commonwealth LNG finalized a supply deal with Australian LNG firm Woodside in September.
The deals are 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 is focused on completing the remaining steps necessary to achieve its goal of making a final investment decision on the project in the first quarter of 2024, with first cargo deliveries expected in 2027,” the firm said in the statement on Monday.
Commonwealth added that an accelerated construction schedule will allow the project to be built in three years using a modular approach with major components being fabricated offsite.
The company is planning to build the liquefaction and export facility on the west bank of the Calcasieu Ship Channel at the mouth of the Gulf of Mexico near Cameron.
Besides six trains, the facility also 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.