February 29, 2024

Commonwealth LNG has entered into a memorandum of understanding with OnStream CO2 LLC, a joint venture between Carbonvert Inc. and Castex Carbon Solutions, LLC, for a carbon capture and storage (CCS) solution at Commonwealth’s liquefied natural gas (LNG) facility under development in Cameron, Louisiana.

Under the agreement, OnStream CO2 will design, construct, own, and operate carbon dioxide capture equipment near the Commonwealth LNG site. Commonwealth will supply carbon dioxide emitted from the LNG facility for a 20-year term, the Houston-based company said in a news release Tuesday.

The captured carbon dioxide will be permanently sequestered at the Cameron Parish CO2 Hub, which Castex will operate. The Carbonvert-Castex joint venture recently announced an operating agreement with the State of Louisiana to develop a 24,000-acre tract of land offshore Cameron Parish, where it will permanently store carbon dioxide in a hub with capacity for more than 250 million metric tons, according to the release.

“Adding carbon capture technology complements our comprehensive goal of achieving best-in-class environmental standards through measures that also include a focus on responsibly sourced gas and the installation of the highest efficiency gas turbines”, Commonwealth LNG Founder and Executive Chairman Paul Varello said.

“Commonwealth’s commitment to our storage site is a great first step and instills confidence in the Lake Charles industrial corridor to launch CO2 capture initiatives and enhance resilience amidst carbon-related global trade requirements and customers’ increasing demand for low-carbon products”, Carbonvert Founder and CEO Alex Tiller said.

“We are pleased to work with Commonwealth LNG to achieve the shared vision of safely, permanently and economically reducing CO2 emissions”, Castex EVP and CFO Aaron Killian said. “OnStream’s tailored CO2 capture, transportation, and storage solution will allow Commonwealth LNG to achieve key environmental initiatives while focusing on its core LNG business”.

Commonwealth said it expects a final investment decision on its LNG project in the first half of 2024, with first cargo deliveries projected in 2027. Commonwealth is aiming for an accelerated construction schedule by using a modular approach with major components being fabricated offsite. The final terms of the carbon capture arrangement remain subject to negotiation of a definitive agreement between the parties, the company said.

The Cameron Parish CO2 Hub will be “a leading choice for regional emitters seeking efficient and sustainable decarbonization solutions”, Carbonvert and Castex said in an earlier joint news release. Carbonvert and Castex formed a 50-50 joint venture in August 2022 to identify and advance CCS projects in Louisiana.

Commonwealth is developing an LNG export terminal project located on the Calcasieu River at the Gulf of Mexico near Cameron, Louisiana, with a capacity of 9.3 million metric tons per annum (mtpa). The project’s leadership team is committed to building a world-class LNG facility while relentlessly focusing on safety, managing risk and achieving best-in-class environmental standards, the company said.

In September, Commonwealth LNG entered into separate heads of agreements (HOAs) with EQT Corp. and the MET Group for one mtpa of LNG each. The EQT HOA is for a 15-year tolling agreement, while the MET HOA is for 20 years. For both HOA, the final terms remain subject to negotiations for definitive agreements between the companies. The terms anticipated under the non-binding HOAs will begin in 2027 upon the start of the facility’s commercial operations.

In August, Commonwealth signed a strategic agreement with Baker Hughes for work on its LNG facility under development in Cameron Parish. Baker Hughes will work with Commonwealth to maximize the project’s output and minimize emissions through the use of Baker Hughes’ LM9000 aeroderivative gas turbine technology, according to an earlier news release.

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