Southern LNG to Expand Elba Island LNG Terminal

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Southern LNG Incorporated (Birmingham Alabama) is planning to expand its LNG marine import terminal on Elba Island near Savannah Georgia. The $145 million expansion project is designed to increase sustainable daily send-out capacity from the current 400 mmscfd to 806 mmscfd and its peaking capacity to 1,215 mmscfd of natural gas.

The proposed facilities would include a LNG ship unloading slip with two berths each with unloading arms for liquid and vapor. Southern LNG would also construct a double walled LNG tank capable of holding one million barrels or the equivalent 3.5 Bcf of natural gas.

The heart of the project will be the installation of two 360 mmscfd LNG booster pumps, a 20 mmscfd recondenser, three 180 mmscfd second-stage LNG pumps, three 180 mmscfd submerged combustion vaporizers, a desuperheater, and two dock control buildings with a compressor shelter. The new facilities will affect 87.7 acres on Elba Island, which Southern LNG owns.

Civil construction with regards to the pilings & foundations for the storage tank will begin in June of 2003 and the main construction will commence in early 2004 with a targeted completion date of late 2005. Southern LNG has been negotiating with Chicago Bridge & Iron Company N.V. (NYSE:CBI) (Woodlands Texas) for the land portion of the construction contract.

Southern LNG Incorporated is a wholly owned subsidiary of the El Paso Corporation (NYSE:EP) (Houston Texas). El Paso recently announced that it will exit the LNG market sector and therefore the Elba Island marine terminal could be sold or spun off as an independent operating entity. El Paso has already cancelled its Radio Island LNG project on the Atlantic Coast and its study of a similar facility on the West Coast. In Mexico El Paso has partners in two planned LNG marine terminals and will most likely sell their steak. Many other companies are still forging ahead with their own LNG projects in the US, Mexico and Canada.

For more details on LNG terminal projects plus a listing of all operation and planned LNG terminal projects in the U.S. see the related article: Cheniere Energy Adds a Fourth LNG Receiving Terminal to its Texas Coast Plans

Their view is that LNG will supplement America's natural gas supply. Natural gas is the fuel of choice for the vast majority of the new electrical generation projects being either in planning or being built in the US today. Because of the increase in demand the domestic natural gas market is expected to grow from 22 Tcf/yr to 30 Tcf/yr over the next decade. These companies with LNG marine terminals projects on the boards are planning on capitalizing on that demand growth by gambling that LNG will play an increasingly larger role in the country's energy supply mix.

IIR has been tracking the progress of the Elba Island expansion project since July of 2000.