Royal Dutch Shell subsidiary, Shell US Gas & Power LLC, and Southern Liquefaction Company, LLC, a Kinder Morgan company and unit of El Paso Pipeline Partners, L.P., plan to form a limited liability company to develop a natural gas liquefaction plant in two phases at Southern LNG Company LLC’s existing Elba Island LNG Terminal near Savannah, GA.
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 LNG onto ships for export.
“This announcement underscores how the abundance of natural gas in the U.S. is changing the energy landscape,” said Marvin Odum, president of Shell Oil Co.
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.
The total project is expected to have liquefaction capacity of 2.5 million tons per annum (mtpa) of LNG or 350 MMcf/d of gas. In June 2012, the Elba Island terminal received approval from the U.S. Department of Energy to export up to 4 mtpa of LNG to Free Trade Agreement (FTA) countries. In August, the terminal submitted a filing to the DOE seeking approval to export up to 4 mtpa of LNG to non-FTA countries. Phase I, 1.5 mtpa, requires no additional DOE approval.