Shell sell Elba LNG JV equity interest partner Kinder Morgan

Shell to sell Elba LNG JV equity interest to partner Kinder Morgan

1:46 PM, 16th July 2015
Shell to sell Elba LNG JV equity interest to partner Kinder Morgan

HAGUE, NETHERLANDS: Kinder Morgan Inc and Royal Dutch Shell Plc said that they have reached an agreement for Kinder Morgan to purchase 100 percent of Shell’s equity interest in Elba Liquefaction Company LLC (ELC), the owner of the Elba liquefaction project, which is proposed to be constructed and operated at the existing Elba Island LNG Terminal near Savannah, Georgia.

Construction could begin in fourth quarter of 2015, with initial production expected to occur in late 2017, Shell said.

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

Kinder Morgan currently owns 51 percent of the ELC JV. 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 JV that it does not already own. 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.

“We look forward to this additional investment opportunity that provides attractive returns and that serves a high-credit quality customer in Shell,” said Kimberly Watson, president, east region natural gas pipelines, Kinder Morgan.

“This is a good opportunity to leverage the proven track record of both companies to deliver an innovative LNG export project in the United States,” said Ton Ten Have, upstream Americas VP, LNG operations and growth, Shell.

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