Kinder Morgan Sells 49% Interest in Elba Liquefaction Company to EIG Global Energy Partners Investment Funds

Kinder Morgan Sells 49% Interest in Elba Liquefaction Company to EIG Global Energy Partners Investment Funds

Kinder Morgan has announced that investment funds managed by EIG Global Energy Partners (EIG) have become a 49% joint venture participant in Elba Liquefaction Company, L.L.C. (ELC) which will own 10 liquefaction units and other ancillary equipment to be constructed as part of the Elba Liquefaction Project at Kinder Morgan’s existing Southern LNG Company, L.L.C. Elba Island LNG facility near Savannah, Georgia. EIG paid $385m for the share.

The total project cost is estimated to be approximately $1.3b, excluding capitalised interest.

ST - Kinder Morgan - Courtesy of Kinder Morgan - Elba_Island

Kinder Morgan President and CEO, Steve Kean said: “We are excited that EIG will become an equity owner in Elba Liquefaction Company as construction continues at Elba Island. The project, which began construction on Nov. 1, 2016, is supported by a 20-year contract with Shell. As we have told the market in past months, this JV is another strategic step towards achieving our stated goals of strengthening our balance sheet and positioning the company for long-term value creation.”

Managing Director of EIG, Wallace Henderson said: “This is a tremendous project that builds on our long-standing and extensive experience in LNG and LNG-related infrastructure. We are delighted to partner with Kinder Morgan and its outstanding development team to make the Elba Liquefaction Project a reality.”

Initial liquefaction units are currently expected to be placed in service in mid-2018, with final units coming on line by early 2019. In 2012, the Elba Liquefaction Project received authorisation from the Department of Energy (DOE) to export to Free Trade Agreement (FTA) countries, and on December 16th, 2016, the DOE issued non-FTA export authority. The project is expected to have a total capacity of approximately 2.5 million tonnes per year of LNG for export, equivalent to approximately 350 million cubic feet per day of natural gas.

Kinder Morgan, is one of the largest energy infrastructure companies in North America. It owns an interest in or operates approximately 84,000 miles of pipelines and 155 terminals. The company’s pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals, and handle bulk materials like coal and petroleum coke.

EIG specialises in private investments in energy and energy-related infrastructure on a global basis and had $14.4b under management as of December 31, 2016. Since 1982, EIG has been one of the leading providers of institutional capital to the global energy industry, providing financing solutions across the balance sheet for companies and projects in the oil and gas, midstream, infrastructure, power and renewables sectors globally. EIG has invested $23.1b in more than 310 portfolio investments in 36 countries. EIG is headquartered in Washington, D.C., with offices in Houston, London, Sydney, Rio de Janeiro, Hong Kong and Seoul.

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13th March 2017