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Shell to sell stake in Elba LNG project

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LNG Industry,

Kinder Morgan Inc. and Shell has announced that they have reached an agreement for Kinder Morgan to purchase 100% of Shell's equity interest in Elba Liquefaction Company LLC (ELC), the owner of the Elba Liquefaction Project.

The liquefaction project is proposed to be constructed and operated at the existing Elba Island LNG Terminal near Savannah, Georgia, US. 

Kinder Morgan currently owns 51% of the ELC joint venture. Shell owns the remaining 49% and subscribes to 100% of the liquefaction capacity. 

Kinder Morgan's expected incremental investment resulting from this transaction is approximately US$630 million, bringing its total incremental investment in all the liquefaction and terminal facilities at Elba Island to approximately US$2.1 billion.

Permitting continues for the proposed Elba Liquefaction Project, which consists of 10 small scale liquefaction units to be purchased from Shell. These units will be integrated with the existing Elba Island facility .  The next step in the regulatory approval process is for the Federal Energy Regulatory Commission (FERC) to issue a draft environmental assessment.  Subject to regulatory approvals, construction could begin in 4Q15, with initial production expected to occur in late 2017.

"We are very pleased to purchase Shell's equity interest in the joint venture and advance the project with Shell's continued support and subscription to 100 percent of the capacity of our world-class Elba Island terminal," said Kinder Morgan East Region Natural Gas Pipelines President, Kimberly S. Watson. "We look forward to this additional investment opportunity that provides attractive returns and that serves a high-credit quality customer in Shell."

Ton Ten Have, Shell Upstream Americas Vice President LNG Operations and Growth, added: "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 […] Shell and Kinder Morgan have successful relationships in North America based on Kinder Morgan ownership with Shell as a customer and we believe this will be a successful model at Elba as well."

Edited from press release by

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