Southern Liquefaction is a Kinder Morgan company and unit of El Paso Pipeline Partners (EPB), while Shell Gas & Power is the subsidiary of the Anglo-Dutch oil company, Royal Dutch Shell.
The two firms 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 LNG onto ships for export. The move is subject to regulatory approvals.
After finalization of the developments, EPB will own 51% of the new entity and operate the facility through its affiliates, while Shell will own the remaining 49% through its affiliates and subscribe to 100% of the liquefaction capacity.
Once completed, the total project is estimated to have liquefaction capacity of about 2.5 million tons per year of LNG or 350 million cubic feet of gas per day.
Kinder Morgan chairman and CEO Richard D Kinder said the project has already received Free Trade Agreement approval, while the facility is expected to get it in due course.
"This project will facilitate further development of the abundant natural gas resources in the United States and will be a positive factor in the overall balance of trade between the U.S. and other countries," Kinder added.
Commenting on the development, Shell Oil Company president Marvin Odum highlighted that the abundance of natural gas in the country is changing the energy landscape.
"With a measured, phased approach, exports of cleaner burning natural gas can help meet the world’s rising energy needs while also giving a boost to the U.S. economy," added Odum.
