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Kinder Morgan to purchase Shell’s Elba LNG equity

Hydrocarbon Engineering,

Kinder Morgan, Inc. and Shell have announced that they have reached an agreement for Kinder Morgan to buy 100% 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. Kinder Morgan currently owns 51% of the ELC joint venture and Shell owns the remaining 49%. Kinder Morgan’s 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. 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. Subject to regulatory approvals, construction could begin in fourth quarter of 2015, with initial production expected to occur in late 2017.


Kimberly S. Watson, Kinder Morgan East Region Natural Gas Pipelines President, “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% of the capacity of our world class Elba Island terminal. 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 VP LNG Operations and Growth, “this is a good opportunity to leverage the proven track record of both companies to deliver an innovative LNG export project in the US. 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 Claira Lloyd

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