Kinder Morgan Sells Stake in Elba Island LNG Facility, Looks to Trans Mountain Joint Venture

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Researched by Industrial Info Resources (Sugar Land, Texas)--Kinder Morgan Incorporated (NYSE:KMI) said Wednesday it had sold a 49% stake in its Elba Liquefaction Company LLC, which is responsible for the construction of the Elba Island liquefied natural gas (LNG) facility near Savannah, Georgia, to investment funds managed by EIG Global Energy Partners (Washington, D.C.). EIG agreed to make an upfront cash payment of approximately $385 million, as well as reimbursement to Kinder Morgan for prior capital expenditures at the facility.

Construction on the Elba Island facility began late last year, and has a total project cost of $1.3 billion, according to Kinder Morgan. The initial liquefaction plant will be able to produce approximately 2.5 million tons per year of LNG for export, all of which has been contracted to Royal Dutch Shell (NYSE:RDS-A) (The Hague, Netherlands). The initial phase of the project is expected to be completed early next year. The addition of another train could add 1.5 million tons of LNG capacity, bringing the site's total processing capacity up to 4 million tons per year. For more information, see Industrial Info's project reports on Phase I and Phase II of the project.

Late last year, Kinder Morgan said it would invest approximately $3.2 billion on expansion projects in 2017. Other Kinder Morgan projects being tracked by Industrial Info include the expansion of the Trans Mountain Pipeline, which carries crude oil from Alberta to the west coast of British Columbia. The expansion project would bring the pipeline's capacity up from 300,000 barrels per day (BBL/d) to 890,000 BBL/d. The project has a total cost of more than $5 billion. For more information, see Industrial Info's project reports on the Jasper and Hinton sections of the project.

The company also is looking for partners in this project. In a recent conference call, Chief Executive Officer Steve Kean said, "We believe syndicating Trans Mountain is the right answer for our shareholders and for the project. It now represents close to half of our backlog, and we believe the value we can receive from investors willing to participate, plus syndication of risk that comes with it, makes bringing in other investors the best choice."

Kean said the company's backlog was $12 billion during the January conference call.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.