After reaching a final investment decision (FID) next year, the energy investment group Kimmeridge Energy Management intends to cut its ownership of a Louisiana LNG export project from 100% to 51%, Managing Partner Ben Dell told Reuters.
Kimmeridge purchased Commonwealth LNG, which is building a 9.5 million metric tons per annum (MTPA) LNG project in Cameron, Louisiana, in June for an unknown sum. The project has applied to the Department of Energy for the necessary export license, but it has not yet been granted.”We anticipate that with finance, we will reduce our ownership to approximately 51%” of Commonwealth LNG, Dell stated late on Thursday during the Gastech energy conference in Houston.
According to Dell, the idea is to raise the project’s ownership by enlisting infrastructure investors, whose stock will have the effect of reducing Kimmeridge’s total stake.
President of the United States Joe Biden predicted that the administration’s hold on reviewing LNG export permits would end early in 2026 and that a formal invitation to bid (FID) on the project may come in the project’s fourth quarter.
Dell told Reuters, “In my opinion, the earliest date we can FID is late May; the latest date is October, depending on what the DOE does and what they demand.”
According to Dell, Kimmeridge intends to finance the project with $1 billion of its own funds and has the majority of its loan and equity partners lined up and ready to go.
According to him, Commonwealth LNG intends to sell eight of the 9.5 MTPA of production capacity of the plant and hold onto the remaining capacity for its owners to trade.
Kimmeridge’s natural gas production business will provide part of the funding for the plant investment; according to Dell, this division generates between $400 million and $500 million in earnings before interest, taxes, depreciation, and amortization (EBITDA).
Dell stated, “We will assess the shipping, regas, and farther downstream to determine whether we want to participate in that. I would like to see us involved in more than one LNG facility.”
