July 19, 2018 / 8:18 PM / 3 months ago

Kinder Morgan delays startup of Georgia Elba LNG terminal to fourth quarter

(Reuters) - (This July 19th story corrects the first bullet to say the first unit (instead of the first six units) at Elba will enter service in the fourth quarter with the remaining nine units (instead of the remaining four units) expected to enter service ... by the third quarter of 2019.)

Kinder Morgan Inc (KMI) delayed the startup of its nearly $2 billion Elba liquefied natural gas export terminal in Georgia by one quarter to the fourth quarter of 2018:

** KMI said in its earnings release late Wednesday that it expects the first liquefaction unit at Elba will enter service in the fourth quarter with the remaining nine units expected to enter service staggered over time by the third quarter of 2019.

** The project will have the ability to liquefy about 2.5 million tonnes per annum of LNG, equivalent to about 0.35 billion cubic feet per day (bcfd) of natural gas.

** One billion cubic feet of gas is enough to fuel about five million U.S. homes for a day.

** The Elba project is supported by a 20-year contract with a unit of Royal Dutch Shell Plc.

** Elba is owned by units of KMI and EIG Global Energy Partners.

** Separately, KMI said it was evaluating whether it could turn its proposed $2 billion Permian Highway gas pipeline in Texas into a bigger project, using a 48-inch (122-centimeter) pipe instead of a 42-inch pipe, due to the high level of interest in the project.

** The Permian Highway is designed to transport up to 2 bcfd of gas about 430 miles (692 kilometers) from the Waha, Texas, area to the U.S. Gulf Coast and Mexico by late 2020.

** A unit of KMI and EagleClaw Midstream Ventures will be the initial partner in the Permian Highway with 50 percent ownership. Apache Corp and EagleClaw will be significant shippers on the proposed pipe. Apache will have an option to acquire up to 33 percent equity in the project.

** In addition, KMI said the first phase of the Midland Lateral of its 2-bcfd Gulf Coast Express gas pipeline, which will also move gas from the Permian basin to the Gulf Coast, was expected to enter service on Aug. 1.

** KMI said the entire $1.75 billion Gulf Coast project remains on schedule for an October 2019 in service date.

** KMI will build and operate the Gulf Coast project and own a 50 percent interest in the pipe along with DCP Midstream LP (25 percent) and an affiliate of Targa Resources Corp (25 percent). Apache also has an option to purchase up to a 15 percent stake in the project from KMI.

Reporting by Scott DiSavino; Editing by Leslie Adler

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