Kinder Morgan and Shell have reached an agreement for KM to purchase 100 percent of Shell’s 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.
KM currently owns 51 percent of the ELC joint venture, with Shell owning the remaining 49 percent and subscribes to 100 percent of the liquefaction capacity. Buying the remaining 49 percent is expected to cost KM approximately $630 million, bringing its total investment in all the liquefaction and terminal facilities at Elba Island to around $2.1 billion.
Permitting continues for Elba, which consists of 10 small-scale liquefaction units to be purchased from Shell. They will be integrated with the existing facility and enable rapid construction compared with 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.