January 29, 2013 [OPIS] - Shell U.S. Gas & Power and Kinder Morgan's Southern Liquefaction Company intend to jointly develop a natural gas liquefaction plant in two phases at Southern LNG Company's (Southern LNG) existing Elba Island LNG Terminal, near Savannah, Ga.
Southern Liquefaction is also a unit of El Paso Pipeline Partners, which is traded as EPB on the stock exchange.
Subject to various corporate and regulatory approvals, Shell and Kinder Morgan affiliates have agreed to modify EPB’s Elba Express Pipeline and Elba Island LNG Terminal to physically transport natural gas to the terminal and to load the liquefied natural gas (LNG) onto ships for export.
The total project is expected to have liquefaction capacity of approximately 2.5 million tons per year (mtpa) of LNG or 350 million cubic feet of gas per day (Mmcfd).
In June 2012, the Elba Island terminal received approval from the U.S. Department of Energy to export up to 4 mtpa or 500 Mmcfd of LNG to Free Trade Agreement (FTA) countries.
In August 2012, the terminal submitted a filing to the DOE seeking approval to export up to 4 mtpa (500 Mmcfd) of LNG to non-FTA countries.
Phase I of the project, approximately 1.5 mtpa (210 Mmcfd), requires no additional DOE approval.
Once finalized, EPB, through its affiliates, will own 51% of the entity and operate the facility.
Shell, through its affiliates, will own the remaining 49% and subscribe to 100% of the liquefaction capacity.
The project will use Shell’s innovative small-scale liquefaction unit, which will be integrated with the existing Elba Island facility and enable rapid construction compared to traditional large-scale plants.
