HOUSTON--(BUSINESS WIRE)--Kinder Morgan, Inc. (NYSE: KMI) announced today that investment funds
managed by EIG Global Energy Partners (EIG) have become a 49 percent
joint venture participant in Elba Liquefaction Company, L.L.C. (ELC)
which will own 10 liquefaction units and other ancillary equipment to be
constructed as part of the Elba Liquefaction Project at Kinder Morgan’s
existing Southern LNG Company, L.L.C. Elba Island LNG facility near
Savannah, Georgia. To acquire its membership interest, EIG has made an
upfront cash payment of approximately $385 million, consisting of: a
$215 million reimbursement to KMI for EIG’s 49 percent share of prior
ELC capital expenditures, excluding capitalized interest; and a payment
of approximately $170 million in excess of capital expenditures in
consideration of the value created by KMI in developing the project to
this stage.
EIG has agreed to fund its share of future capital expenditures
necessary to complete construction and commissioning of the liquefaction
facility, subject to the terms and conditions contained in the
applicable agreements. The total project cost is estimated to be
approximately $1.3 billion, excluding capitalized interest.
“We are excited that EIG will become an equity owner in Elba
Liquefaction Company as construction continues at Elba Island. The
project, which began construction on Nov. 1, 2016, is supported by a
20-year contract with Shell,” said Steve Kean, Kinder Morgan president
and chief executive officer.
“As we have told the market in past months, this JV is another strategic
step towards achieving our stated goals of strengthening our balance
sheet and positioning the company for long-term value creation,” Kean
said.
“This is a tremendous project that builds on our long-standing and
extensive experience in LNG and LNG-related infrastructure,” said
Wallace Henderson, Managing Director of EIG. “We are delighted to
partner with Kinder Morgan and its outstanding development team to make
the Elba Liquefaction Project a reality.”
Initial liquefaction units are currently expected to be placed in
service in mid-2018, with final units coming on line by early 2019. In
2012, the Elba Liquefaction Project received authorization from the
Department of Energy (DOE) to export to Free Trade Agreement (FTA)
countries, and on Dec. 16, 2016, the DOE issued non-FTA export
authority. The project is expected to have a total capacity of
approximately 2.5 million tonnes per year of LNG for export, equivalent
to approximately 350 million cubic feet per day of natural gas.
Barclays acted as the exclusive financial advisor to KMI during this
transaction.
About Kinder Morgan, Inc.
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy
infrastructure companies in North America. It owns an interest in or
operates approximately 84,000 miles of pipelines and 155 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. For
more information please visit www.kindermorgan.com.
About EIG
EIG specializes in private investments in energy and energy-related
infrastructure on a global basis and had US$14.4 billion under
management as of December 31, 2016. Since 1982, EIG has been one of the
leading providers of institutional capital to the global energy
industry, providing financing solutions across the balance sheet for
companies and projects in the oil and gas, midstream, infrastructure,
power and renewables sectors globally. EIG has invested US$23.1 billion
in more than 310 portfolio investments in 36 countries. EIG is
headquartered in Washington, D.C., with offices in Houston, London,
Sydney, Rio de Janeiro, Hong Kong and Seoul. For more information,
please visit www.eigpartners.com.
Important Information Relating to
Forward-Looking Statements
This news release includes forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995 and
Section 21E of the Securities and Exchange Act of 1934. Generally
the words “expects,” “believes,” anticipates,” “plans,” “will,” “shall,”
“estimates,” and similar expressions identify forward-looking
statements, which are generally not historical in nature. Forward-looking
statements are subject to risks and uncertainties and are based on the
beliefs and assumptions of Kinder Morgan and EIG management, based on
information currently available to them. Although Kinder Morgan
and EIG believe that these forward-looking statements are based on
reasonable assumptions, the firms can give no assurance that any such
forward-looking statements will materialize. Important factors
that could cause actual results to differ materially from those
expressed in or implied from these forward-looking statements include
the risks and uncertainties described in Kinder Morgan’s reports filed
with the Securities and Exchange Commission, including its Annual Report
on Form 10-K for the year-ended December 31, 2015 (under the headings
“Risk Factors” and “Information Regarding Forward-Looking Statements”
and elsewhere) and its subsequent reports, which are available through
the SEC’s EDGAR system at
www.sec.gov
and on its website at
ir.kindermorgan.com
.
Forward-looking statements speak only as of the date they were made, and
except to the extent required by law, Kinder Morgan and EIG undertake no
obligation to update any forward-looking statement because of new
information, future events or other factors. Because of these
risks and uncertainties, readers should not place undue reliance on
these forward-looking statements.