Oil giant Shell is to sell its equity interest in Elba liquid natural gas company for Kinder Morgan for $630million.
Shell announced it had reached an agreement for Kinder Morgan to purchase 100% of Shell’s minority stake in Elba 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. Shell owns the remainder and subscribes to 100% of the liquefaction capacity. The sale will bring Kinder Morgan’s total incremental investment in all the liquefaction and terminal facilities at Elba Island will $2.1billion.
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% of the capacity of our world-class Elba Island terminal,” said Kinder Morgan’s Kimberly Watson.
Shell’s US LNG vice president Ton Ten Have said: “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.
Under full development, the Elba Liquefaction Project is expected to have a total capacity of approximately 2.5million tonnes per year of LNG for export, which is equivalent to approximately 350,000 Mcf per day of natural gas.
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