HOUSTON--(BUSINESS WIRE)--Kinder Morgan, Inc. (NYSE: KMI) and Shell (NYSE: RDS.A, RDS.B) today
announced 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. Kinder Morgan currently owns 51 percent
of the ELC joint venture. 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 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. 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.
“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.”
“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, Shell Upstream Americas VP LNG Operations
and Growth. “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.”
In 2012, the project received authorization from the Department of
Energy to export to Free Trade Agreement (FTA) countries. An application
to export to non-FTA countries is pending. Under full development, the
Elba Liquefaction Project is expected to have a total capacity of
approximately 2.5 million tonnes per year of LNG for export, which is
equivalent to approximately 350,000 Mcf per day of natural gas.
The project was first announced in January 2013 by Southern Liquefaction
Company, LLC, a Delaware limited liability company, and a unit of Kinder
Morgan, and Shell to add liquefaction and export capability to Southern
LNG Company, L.L.C.’s existing liquefied natural gas regasification
terminal at Elba Island in Chatham County, Georgia.
Kinder Morgan, Inc. (NYSE: KMI) is the largest energy infrastructure
company in North America. It owns an interest in or operates
84,000 miles of pipelines and 165 terminals. The company’s pipelines
transport natural gas, gasoline, crude oil, CO2 and other
products, and its terminals store petroleum products and chemicals, and
handle bulk materials like coal and petroleum coke. Kinder Morgan is the
largest midstream and third largest energy company in North America with
an enterprise value of approximately $130 billion. For more information
please visit www.kindermorgan.com.
This news release includes forward-looking statements. These
forward-looking statements are subject to risks and uncertainties and
are based on the beliefs and assumptions of management, based on
information currently available to them. Although Kinder Morgan
believes that these forward-looking statements are based on reasonable
assumptions, it can give no assurance that such assumptions will
materialize. Important factors that could cause actual results to
differ materially from those in the forward-looking statements herein
include those enumerated in Kinder Morgan’s reports filed with the
Securities and Exchange Commission. Forward-looking statements
speak only as of the date they were made, and except to the extent
required by law, Kinder Morgan undertakes no obligation to update or
review any forward-looking statement because of new information, future
events or other factors. Because of these uncertainties, readers
should not place undue reliance on these forward-looking statements.
