KMI gives update on natural gas and terminals projects

Construction continues on the nearly US$2 billion project. The federally approved project at the existing Southern LNG Co. facility at Elba Island will have a total liquefaction capacity of approximately 2.5 million tpy of LNG, equivalent to approximately 350 million ft³/d of natural gas. 

The project is supported by a 20-year contract with Shell. The first of 10 units is expected to be placed in service in 1Q19, with the remaining nine units to come online throughout 2019. Elba Liquefaction Co. LLC (ELC), a KMI joint venture (JV) with EIG Global Energy Partners as a 49% partner, will own the liquefaction units and other ancillary equipment. Certain other facilities associated with the project are 100% owned by KMI.

Additionally, construction is continuing as planned on the Elba Express Modification Project, which is adding upstream compression facilities on the Elba Express pipeline to provide feed gas for liquefaction. Phase II of this project was placed in service on Sept. 10 and the remainder of the project is expected to be placed in service in November 2018.

KMI has also provided updates on its North America terminals projects.

Construction of all major facilities at the Base Line Terminal in Edmonton, Alberta, Canada, is materially complete, with the final tanks placed in service in 3 – 4Q18, slightly ahead of schedule. The 12-tank, 4.8 million bbl facility is fully contracted with long-term, firm take-or-pay agreements with creditworthy customers. The 50/50 JV crude oil merchant storage terminal developed by KML and Keyera Corp. is expected to be completed under budget, with Kinder Morgan investing approximately CAN$373 million.

Permitting efforts continue on the distillate storage expansion project at KML’s Vancouver Wharves terminal in North Vancouver, British Columbia, Canada. The CAN$43 million capital project, which calls for the construction of two new distillate tanks with combined storage capacity of 200 000 bbls and enhancements to the railcar unloading capabilities, is supported by a 20-year initial term, take-or-pay contract with an affiliate of a large, international integrated energy company. The project is expected to be placed in service in 1Q21.

In 3Q18, Greens Port CBR, LLC (GCBR), a 50/50 JV between affiliates of KMI and Watco Companies LLC (Watco), commissioned the first phase of enhancements to its unit-train facility at Watco’s Greens Port Industrial Park on the Houston Ship Channel, allowing for the loading of refined products for export to Mexico and other destinations. GCBR also loaded its first unit-train of refined products in mid-September. Upon completion in 2Q19, GCBR will connect with existing cross-channel lines to KMI’s Pasadena and Galena Park refined products storage complex. GCBR’s approximately US$11 million investment is supported by a three-year, firm volume commitment from a major refiner.

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