Elba Island LNG Export Terminal Delayed
US pipeline and midstream company Kinder Morgan said July 18 the first trains at its 2.5mn metric tons/year Elba Island LNG export terminal in Georgia would not come online until the fourth quarter this year, representing a three-month delay for the $2bn project.
All six trains at the terminal, located adjacent to Southern LNG’s regasification import terminal near Savannah, are expected to be operating by 3Q 2019. The export project, a joint venture of Kinder Morgan (51%) and EIG Global Energy Partners (49%), is supported by a 20-year contract with Anglo-Dutch major Shell.
During a conference call to discuss his company’s 2Q 2018 results July 18, Kinder Morgan executive chairman Rich Kinder said there were delays getting units assembled and delivered to the site. There were also construction delays, Kinder said, which had been addressed with IHI E&C, the project’s EPC contractor.
Despite the delays at Elba Island, Kinder Morgan said the second quarter this year was “outstanding” for its natural gas pipelines segment.
“The segment benefited from increased activity across nearly all of our large transmission intrastate and interstate systems, as well as on our midstream gathering and processing assets…due to increased drilling and production in the Bakken (in North Dakota) and the Haynesville (Louisiana and Texas),” the company said.
Revenue for its transmission assets were higher largely due to increased activity in the Permian basin, increased power demand and gas exports to Mexico.
At the end of the quarter, Kinder Morgan Texas Pipeline, EagleClaw Midstream Ventures and Apache announced a letter of intent to develop the Permian Highway Pipeline Project, a $2bn pipeline designed to transport 2bn ft3/day of natural gas from the Waha hub in Texas to US Gulf Coast and Mexico markets.
Kinder Morgan and EagleClaw will initially hold 50% each of the project, while Apache – which has been jointly developing the project – will have an option to acquire a 33% equity interest from the initial partners. Apache has also committed to use up to 500mn ft3/day of transportation capacity on the project.
Pending the execution of definitive agreements and regulatory approvals, the new pipeline could be in service by the end of 2020, Kinder Morgan said.