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Commodities

Kinder Morgan to begin construction on Elba Liquefaction project November 1

HOUSTON (Reuters) - Kinder Morgan KMI.N will begin construction on its Elba Liquefaction project near Savannah, Georgia, on Nov. 1, ahead of a final ruling from federal regulators on rehearing requested by environmental activists, the company said on Wednesday.

The company received approval from the Federal Energy Regulatory Commission (FERC) on June 1, but the Sierra Club and associated individuals have since filed a request for a rehearing, which is still pending FERC.

The project, which is supported by a 20-year contract with Shell, will be constructed and operated next to the existing Elba Island liquefied natural gas (LNG) terminal and have capacity to export 2.5 million tonnes per year of LNG.

A number of other projects under construction by the midstream giant are facing regulatory and legal hurdles at a time when energy infrastructure projects in North America are drawing increased scrutiny from environmental and native American groups.

Kinder Morgan on Wednesday said it was appealing a decision by a judge in Wood County, Ohio, who ruled the company did not qualify for eminent domain for the construction of its proposed Utopia Pipeline. That line would transport 50,000 barrels per day (bpd) of ethane and ethane-propane mix across Ohio to Windsor, Ontario.

The company has filed lawsuits for eminent domain in other counties in Ohio for construction of the line, executives said, adding they were able to obtain the property they sought.

“It is typical in all of our projects that we try to avoid use of eminent domain and we negotiate with a spectrum of landowners,” executives said, noting about 65 percent of the land acquired for its pipeline construction comes through easements without eminent domain.

The appeal could take months, Kinder Morgan said.

Kinder Morgan’s Trans Mountain Pipeline expansion, which would increase capacity on the line from 300,000 bpd to 890,000 bpd, remains under review by Canadian government, after the National Energy Board recommended its approval, subject to 157 conditions. A decision on that project is expected on Dec. 20, 2016.

Reporting by Liz Hampton; Editing by Sandra Maler and David Gregorio

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