Americas News
Major Energy Companies Plan U.S. LNG Export Project
Energy companies Royal Dutch Shell Plc and Kinder Morgan Inc. [NYSE: KMI] say they plan to develop a natural gas liquefaction plant with a capacity of 2.5 million tonnes per year (mtpa) in the U.S. state of Georgia for the export of liquefied natural gas (LNG).
The companies' subsidiaries, Shell US Gas & Power LLC and Southern Liquefaction Company LLC, a Kinder Morgan subsidiary and unit of El Paso Pipeline Partners L.P. (EPB) [NYSE:EPB], plan to form a limited liability company to develop the plant at the existing Elba Island LNG import terminal near Savannah, Georgia.
"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 U.S. and other countries," said Richard D. Kinder, chairman and CEO of Kinder Morgan.
The companies plan to use EPB's existing Elba Express Pipeline and Elba Island LNG Terminal to transport natural gas to the terminal and load LNG onto ships.
"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 U.S. economy."
The Elba Island terminal has received U.S. approval to export up to 4 mtpa of LNG to Free Trade Agreement (FTA) countries, and it is seeking permission to export the same volume to non-FTA countries.
The project will have two phases, with the first phase expected to produce 1.5 mtpa.
U.S. natural gas production has jumped in recent years with the development of shale oil through hydraulic fracturing, but much of that gas is used for domestic energy needs.
David Bull, a senior consultant at Royal Haskoning Ocean Shipping Consultants, recently said the international supply of LNG will depend on how much of the fuel the U.S. chooses to export.
Shell has said it wants to expand its sales of LNG for transportation purposes, including for shipping in the Great Lakes, the Gulf of Mexico, and the Baltic Sea, to 5 mtpa over the next decade.
