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.
