Kimmeridge Texas Gas (KTG), an affiliate of the energy-focused alternative investment manager Kimmeridge, has obtained funding for its proposed liquefied natural gas (LNG) terminal near Cameron, Louisiana.
The firm priced its inaugural $500 million senior unsecured notes offering at 8.50%, intending to use the net proceeds to repay a part of its outstanding revolver borrowings. A portion of the funding will also be used to progress ongoing initiatives, such as the buildout of the Commonwealth LNG project in which Kimmeridge purchased a majority stake in June 2024 .
Bryan Gunderson , Chief Financial Officer of KTG, said: “This inaugural bond offering reflects the strength of our differentiated platform, and the confidence investors have in our future. The financing, secured on favorable terms, will help accelerate our growth trajectory, including our highly compelling offtake agreement with Commonwealth LNG.”
The company says it capitalized on a favorable shift in natural gas prices to become the first issuer in the 2025 high-yield market. As explained, the final order book was oversubscribed and broadly allocated to a blue-chip investor base after meetings with more than 30 high-yield investors were held.
Commonwealth LNG is developing a 9.5 million tonnes per annum (mtpa) liquefaction and export facility at the Calcasieu Ship Channel at the mouth of the Gulf of Mexico. The facility is set to have five 50,000 cubic meter storage tanks and be able to accommodate vessels with a capacity of up to 216,000 cubic meters.
The terminal was one of the projects that were put on hold due to the requirement to carry out additional environmental reviews before being granted export permits. While the player initially expected to reach a final investment decision (FID) in the first half of 2025, the FID is now targeted for Q3 2025, according to the company website. Furthermore, LNG production is envisaged to start in Q4 2028.
At the end of December 2024, David Lang was appointed General Counsel and Chief Commercial Officer (CCO) of Commonwealth LNG. Before that, Glencore signed a heads of terms (HoT) enabling it to get 2 mtpa of LNG for 20 years from the future export terminal.