Saudi Aramco has reportedly signed a long-term supply agreement with Commonwealth LNG, securing 1 million tons of liquefied natural gas annually from the developer's Louisiana facility. This move aligns with Aramco’s aggressive strategy to become a major player in the global LNG trading market.
Project Details and Timeline
The Commonwealth LNG facility, located in Cameron, Louisiana, is designed with a total annual capacity of 9.5 million tons. While the project was originally slated for a 2027 launch, the timeline has shifted significantly:
Current Target: Operational by 2031.
Reason for Delay: The developer cited regulatory hurdles, specifically a temporary ban on new LNG capacity during the final year of the Biden administration. Although the Trump administration later lifted the ban, the interruption pushed back the construction schedule.
Financial Scope: The first phase of construction is estimated at $11 billion, with projected annual export revenues reaching $3.5 billion.
Strategic Importance for Both Parties
For Saudi Aramco:
This deal is a critical building block in Aramco’s "20 million tons per year" portfolio goal. By tapping into gas from the Eagle Ford shale basin, Aramco is establishing a firm foothold in the U.S. energy market. Prior to this deal, the company had secured roughly 4.5 million tons of its 20-million-ton target.
For Commonwealth LNG:
The developer is aiming for 8 million tons in contracted volume before making a Final Investment Decision (FID). This agreement brings them one step closer to that threshold, with the FID now expected by the end of the first quarter of this year.
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