Kimmeridge Texas Gas (KTG) and Commonwealth LNG have signed a heads of terms agreement with Glencore for the supply of LNG and natural gas.
Under the agreement, Glencore will purchase 2mtpa of LNG for 20 years from Commonwealth LNG, alongside an equivalent supply of natural gas from KTG, based on international pricing.
The definitive agreements between the parties are expected to be finalised in the fourth quarter of 2024.
KTG, a natural gas producer, holds approximately 148,000 net acres in Texas, including the dry gas window of the Eagle Ford Shale within Webb, La Salle, McMullen and Karnes counties.
The company currently produces around 400 million cubic feet equivalent of natural gas and oil per day.
Commonwealth LNG is developing a 9.5mtpa LNG export terminal project on the Calcasieu River near Cameron, Louisiana, in the Gulf of Mexico.
The company expects to make a final investment decision on this facility in the first half of 2025, with the first LNG production slated for 2028.
However, the project's environmental impact is under scrutiny, according to Reuters.
In July, a US court mandated federal regulators to reassess the greenhouse gas emissions impact of the Commonwealth LNG project, following a lawsuit by environmental groups claiming inadequate consideration of the issue.
Earlier this year, private equity firm Kimmeridge, through its subsidiary KTG, increased its ownership in Commonwealth LNG to more than 90%.
KTG CEO and president David Lawler said: “Our partnership with Glencore represents another tangible step forward for the KTG platform in becoming a fully integrated provider of reliable, secure and clean energy from wellhead to water.”
Glencore global head of LNG, gas and power Maxim Kolupaev said: “We are excited to partner with Kimmeridge Texas Gas and Commonwealth, two leading companies in the natural gas space, under a novel framework that leverages Glencore's premier LNG marketing platform and investment grade credit rating to facilitate access to international pricing.”
Glencore has also been actively expanding its presence in the LNG market, having previously secured LNG deals with US energy companies including Marathon Oil and Cheniere Energy.
