The LNG project is currently awaiting an export licence from the Department of Energy. Credit: GreenOak/Shutterstock.

Kimmeridge Energy Management, an energy investment firm, is set to reduce its ownership in a Louisiana-based LNG export project from 100% to 51%, reports Reuters, citing managing partner Ben Dell. 

Kimmeridge plans to reduce the stake following the project’s final investment decision (FID), expected next year.  

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In June 2024, Kimmeridge acquired Commonwealth LNG, which is developing an LNG plant with a capacity of 9.5 million metric tonnes per annum (mtpa) in Cameron, Louisiana.  

The project is currently awaiting an export licence from the Department of Energy.  

“Our expectation is under financing we will drop down to around 51%” stake in Commonwealth LNG, Dell stated at the Gastech energy conference in Houston. 

The strategy involves inviting infrastructure investors to contribute equity, which would result in a dilution of Kimmeridge’s shareholding.  

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Dell expressed optimism that the US President Joe Biden’s administration’s pause on LNG export-permit reviews could conclude early next year, potentially allowing an FID for the project by the fourth quarter of 2025. 

“My personal view is the inside date we can FID is late May, the outside date is October depending on what the DOE does and what they require,” Dell told the publication. 

Kimmeridge plans to commit $1bn of its funds towards the project’s financing and has secured most of the necessary debt and equity partners, pending the project’s approval.  

According to Dell, Commonwealth LNG plans to market 8mtpa of the plant’s production capacity, reserving the rest for trading by the owners. 

Earlier in September 2024, Kimmeridge‘s unit Kimmeridge Texas Gas (KTG) and Commonwealth LNG reached a preliminary agreement with Glencore for LNG and natural gas supply.  

Glencore is set to purchase 2mtpa of LNG for 20 years from Commonwealth LNG, with a corresponding supply of natural gas from KTG, priced on international markets.