Shell sells Elba liquefaction project interest to Kinder Morgan

Kinder Morgan and Shell informed that they have reached an agreement for Kinder Morgan to purchase 100 percent of Shell’s equity interest in the Elba liquefaction project, which is proposed to be constructed and operated at the existing Elba Island LNG terminal near Savannah, Georgia.

Kinder Morgan currently owns 51 percent of the ELC joint venture, the companies informed in a statement.

Shell owns the remaining 49 percent and subscribes to 100 percent of the liquefaction capacity. Kinder Morgan will purchase the remaining 49 percent of the joint venture. Kinder Morgan’s expected incremental investment resulting from this transaction is approximately $630 million, bringing its total incremental investment in all the liquefaction and terminal facilities at Elba Island to approximately $2.1 billion.

Permitting continues for the proposed Elba liquefaction project, which consists of 10 small-scale liquefaction units to be purchased from Shell. They will be integrated with the existing Elba Island facility and enable rapid construction compared to traditional large-scale plants. The next step in the regulatory approval process is for the Federal Energy Regulatory Commission to issue a draft environmental assessment.

The construction could begin in the fourth quarter of 2015, with initial production expected to occur in late 2017.

Under full development, the Elba Liquefaction Project is expected to have a total capacity of approximately 2.5 million tons per year of LNG for export, which is equivalent to approximately 350,000 Mcf per day of natural gas.

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Image: BG Group

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