Gas company Caturus introduces a new venture, 'Well To Water', planning to merge fracking processes with the export of liquefied natural gas (LNG)
Caturus, a new gas company formed by private equity group Kimmeridge, is set to expand its gas production capacity significantly. The company plans to scale up from its current net production of over 600 million cubic feet equivalent per day (MMcfe/d) to a long-term goal of 3 billion cubic feet equivalent per day (Bcfe/d) of natural gas production. This ambitious expansion is backed by a significant equity investment from Mubadala Energy, which has acquired a 24.1% stake in Caturus.
The expansion strategy of Caturus is centred around a wellhead-to-water approach, which integrates upstream gas production with midstream infrastructure and a best-in-class LNG export facility. The LNG export terminal, Commonwealth LNG, is planned to have a capacity of 9.5 million tonnes per annum (mtpa) and is currently advancing with engineering, procurement, and construction services contracted to Technip Energies. The project anticipates a final investment decision in 2025, backed by long-term binding LNG offtake agreements with major global buyers such as Glencore, JERA, and PETRONAS.
However, the construction process for Caturus presents several challenges. These include coordinating a complex LNG export facility build, managing the scaling of upstream production efficiently and safely, ensuring robust financing and risk management, and integrating upstream gas supply reliably with midstream and export capacity.
Dave Lawler, the former head of BP's onshore U.S. business, will run the upstream side of Caturus. The company has also secured 20-year contracts with companies like Glencore, JERA, and EQT to take 6 million tons per year of the planned 9 million tpa capacity at Commonwealth LNG.
Caturus is a tie-up of two Kimmeridge investments: Commonwealth LNG (a Louisiana liquefied natural gas export project) and Kimmeridge Texas Gas. The company's downstream needs will be met by Commonwealth LNG in Cameron, LA.
In a bid to overcome labor constraints on the Gulf Coast, Caturus is considering a modular building approach for the LNG plant. Big components for the LNG plant will be fabricated in a controlled factory environment and then bolted together on site.
Caturus' gas production capacity can be boosted as their 14,000 foot deep wells will intersect multiple layers of gas-laden rock. Lawler's team has had success drilling and fracking ultradeep, high-pressure gas wells in an area between Encinal and Laredo, producing 600 million cubic feet per day.
The name Caturus, for the company, references a predatory fish that lived during the Jurassic epoch 150 million years ago. Since 2012, Kimmeridge funds have delivered an average annualized 27%. The biggest player in the neighbourhood is EOG Resources, which expects this corner of south Texas to produce 21 trillion cubic feet of gas.
Dell, from Caturus, says there is plenty left to consolidate along the Gulf Coast. Growth is as imperative as execution for Caturus, and the company failed last year in an attempt to acquire SilverBow Resources. Kimmeridge formed Caturus out of assets from its fifth and sixth investment funds. The company opened an Abu Dhabi office this year to keep Mubadala Energy CEO Mansoor Mohamed al Hamed up to date.
Caturus received its export license from the Dept. of Energy in February and final authorizations from the Federal Energy Regulatory Commission in June. Mubadala Energy, part of the UAE’s $330 billion sovereign wealth fund, has invested an undisclosed amount for a 24% stake in Caturus.
[1] Caturus Aims to Boost Gas Production Capacity with Integrated LNG Export Platform. (n.d.). Retrieved August 10, 2022, from https://www.rigzone.com/news/articles/156755-caturus-aims-to-boost-gas-production-capacity-with-integrated-lng-export-platform [3] Caturus, the New Gas Company, Targets a Substantial Scale-Up in Production. (n.d.). Retrieved August 10, 2022, from https://www.rigzone.com/news/articles/156754-caturus-the-new-gas-company-targets-a-substantial-scale-up-in-production [5] Caturus: A New Gas Company with Big Plans for the Future. (n.d.). Retrieved August 10, 2022, from https://www.rigzone.com/news/articles/156756-caturus-a-new-gas-company-with-big-plans-for-the-future
- The integration of upstream gas production with midstream infrastructure and an LNG export facility by Caturus is part of their strategic approach to boosting gas production capacity, utilizing commonwealth LNG's planned 9.5 million tonnes per annum capacity for export.
- The ambitious expansion plans of Caturus in the energy industry are supported not only by their internal strategies, but also by significant finance investments from Mubadala Energy, a major player in the UAE's finance and energy sectors.
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