An LNG export facility under development on the Louisiana Gulf Coast is taking a new approach to construction it believes will significantly reduce costs.
Commonwealth LNG plans to export its first LNG in the second quarter of 2026 from near Cameron, Louisiana. Designs for the project call for an 8.4 million tonnes per annum LNG liquefaction facility, with six trains and six 50,000 cubic-metre storage tanks.
Speaking at the World LNG & Gas Series Americas Summit & Exhibition, Commonwealth president and CEO Paul Varello said his company is focused on cost efficiency in the construction process.
“Developing projects includes a relentless pursuit of cost because capex is the single largest element of pricing for LNG,” he said. “Like it or not, LNG is a commodity and commodities are driven by price.”
In order to cut its costs, Commonwealth plans to have most of its construction done offsite and brought to the 400-acre plot of land near the coast. It has partnered with Technip Energies, which will build much of the facility in modules. Varello said two modules will be needed for each train, and each will only need to be connected to a power source to be operational.
“They are completely fabricated, meaning that even the lights are put in,” he said. “The modular approach reduces our costs and schedule … it will save $300 million in interest and construction overhead.”
Varello said the Commonwealth LNG terminal will use different contract terms when compared to most US exporters. He said the company will offer contracts as short as 10 years, which he believes will appeal to customers concerned over global efforts to reach net-zero carbon emissions by 2050.
“Our customers are saying, ‘Our government is saying that by 2050 we’ll be almost all renewables’,” he said. “Ten years makes them much happier. They give us 10 years, and then we give them a free option to extend for another four or five, six years.”