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Shell and Kinder Morgan to export LNG from USA

06 February 2013

Shell US Gas & Power and Southern Liquefaction Company, an EPB Kinder Morgan subsidiary, have announced plans to develop a natural gas liquefaction plant in two phases at Southern LNG’s existing Elba Island LNG terminal, near Savannah, Georgia.

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. 

“Kinder Morgan is delighted to be working with Shell at Elba Island on this project, which has already received Free Trade Agreement approval,” said Kinder Morgan Chairman and CEO Richard D. Kinder. “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 US and other countries.”

“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 Company. “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 US economy.” 

Once finalised, 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 a liquefaction capacity of approximately 2.5 million tonnes per year (mtpa) of LNG or 350 million cubic feet of gas per day (Mmcfd). 

The move, which comes in the wake of a recent report commissioned by the US Department of Energy supporting LNG exports, is the latest among major energy companies seeking to capitalise on North America’s newly-found abundance of natural gas from shale. 

ExxonMobil last year said it would develop a Texas export facility and Chevron has linked up with Apache to liquefy and export natural gas out of western Canada. Shell is also working on a Western Canada LNG export project.

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