Abu Dhabi-based Mubadala Energy and its partners have confirmed the start of full construction on their $13 billion liquefied natural gas project in the US after announcing the final investment decision for the project.
Mubadala Energy, US-based alternative asset manager Kimmeridge and Canada’s CPP Investments closed $9.75 billion of financing for the Caturus Commonwealth LNG project in Louisiana state, the Abu Dhabi company said on Friday.
The project has a total production capacity of 9.5 million tonnes per annum.
The transaction drew strong interest from both equity and debt investors, resulting in total commitments of $21.25 billion, the company said.
The development comes as demand for natural gas remains strong globally amid disruption to supplies due to the closure of the Strait of Hormuz.
“This FID announcement is a major milestone for Commonwealth LNG and is a critical step in realising its strategy for a fully integrated ‘wellhead-to-water’ operation,” Mansoor Mohamed Al Hamed, managing director and chief executive of Mubadala Energy, said.
“The investment adds to our existing global gas-weighted portfolio and expands our exposure across the full gas value chain – an important driver of our longstanding growth plans.”
Mubadala Energy, which already holds a 24.1 per cent stake in the Caturus platform, is also an equity participant in the project’s financing. It, however, did not disclose its total investment in the platform or the project.
CPP Investments, meanwhile, will contribute $1.2 billion in financing to increase its total stake in the Caturus platform to 31 per cent, including previous investments.
EOC Partners, funds and accounts managed by BlackRock, and an Ares Infrastructure Opportunities fund are the other major investors in the project.
Long‑term offtake agreements have already been secured for the project with a diversified group of global energy and industrial counterparties, including EQT, Glencore, Mercuria, Malaysia’s Petronas, and Saudi Arabia’s Aramco Trading, according to the statement.
The first phase of the development is expected to generate more than $3 billion in annual export revenue when operations commence in 2030.
“Global gas demand is unquestionably accelerating and Caturus is positioned to be a differentiated leader across the value chain from upstream production to LNG export,” said Caturus chief executive David Lawler.
Global demand for LNG is forecast to rise between 54 per cent and 68 per cent by 2040, and then between 45 per cent and 85 per cent by 2050 from 422 million metric tonnes in 2025, boosted by growing Asian appetite for the fuel, energy company Shell said in a report in March.
Mubadala Energy, a unit of Abu Dhabi's Mubadala Investment Company, has operations in 10 countries, with production of about 450,000 barrels of oil equivalent per day. Gas comprises 70 per cent of its portfolio.
Last year, it signed an initial deal with Indonesia's PLN Energi Primer Indonesia, a subsidiary of state-owned electricity company PT PLN, to supply gas from its gasfields in the Andaman Sea.
