Glencore is to buy two million tonnes per annum of LNG as part of a 20-year deal with two Texas companies.
The leading mining company struck the deal with Commonwealth LNG, and will be supplied the equivalent natural gas supply from Kimmeridge Texas Gas (KTG) under a netback agreement at international prices.
The agreements are expected to be finalised in Q4. Commonwealth anticipates a final investment decision on its LNG export facility in Cameron, Louisiana in the first half of 2025, with the first LNG production expected in 2028.
David Lawler, KTG CEO and President, said, “Our partnership with Glencore represents another tangible step forward for the KTG platform in becoming a fully integrated provider of reliable, secure and clean energy from wellhead to water.”
Maxim Kolupaev, Glencore Global Head of LNG, Gas and Power, said the deal creates a novel framework which leverages Glencore’s premier LNG marketing platform and investment grade credit rating to facilitate access to international pricing.
KTG is a producer of natural gas, with approximately 148,000 net acres in Texas overlaying the dry gas window of the Eagle Ford Shale within Webb, La Salle, McMullen and Karnes counties.
The company produces approximately 400 million cubic feet equivalent of natural gas and oil per day, selling into the South Texas market with access to Mexican export channels, to LNG terminals for global sales, and into pipelines directly servicing Gulf Coast petrochemical facilities.
Glencore has set an interim target of reducing its industrial emissions footprint by 25% by the end of 2030.
During 2023, the Scope 1 and 2 market-based emissions of its industrial assets were 27 million tonnes CO2e, a 7% decrease on 2022 – but Scope 3 emissions totalled 406 million tonnes CO2e, compared with 368 million tonnes CO2e in 2022.
In 2023, Glencore produced 113.6 million tonnes of coal, the majority sold into the c.1.3 billion tonne seaborne coal market, and it also produces steelmaking coal, used in the manufacture of steel in blast furnaces.
The company remains committed to the ‘responsible phase-down’ of its coal portfolio and the expected growth in clean energy and low-carbon technologies is leading to “an increased need for ‘transition’ commodities and we are investing to meet an expected significant increase in demand for these,” according to its Climate Action Transition Plan.
