FERC has approved Kinder Morgan Inc.’s (KMI) plan to add liquefaction and export capability to the existing Elba Island LNG Terminal near Savannah, GA, as well as make modifications to existing pipelines in support of the project.

KMI’s Elba Liquefaction Co. LLC and Southern LNG Co. LLC received authorization from the Federal Energy Regulatory Commission for the $2 billion Elba Liquefaction Project [CP14-103]. The first of 10 liquefaction units is expected to be placed in service in the second quarter of 2018, with the remaining nine units coming online before the end of 2018.

The project, which is supported by a 20-year contract with Royal Dutch Shell plc, received a favorable environmental review earlier this year (see Daily GPI,Feb. 8). When the liquefaction project is complete, the terminal will have the capability to both export and import liquefied natural gas (LNG). The liquefaction project is expected to have a total capacity of 2.5 million tonnes per year of LNG for export.

Additionally, Elba Express Co. LLC (EEC) and Southern Natural Gas Co. LLC (SNG) received FERC certificates for the EEC Modification Project [C14-115] and SNG Zone 3 Expansion Project [CP14-493], respectively. Together, these projects would cost about $306 million and include additional compression and related work for north-to-south capacity expansions on Elba Express Pipeline that will supply additional gas to industrials and utilities in Georgia and Florida and to Elba Island for liquefaction.

Facilities for these pipeline projects are expected to be placed in service late in the fourth quarter of this year.

The SNG Zone 3 project would add about 235 Bcf/d of firm capacity in Rate Zone 3 of the existing pipeline system. Zone 3 encompasses nearly all of Southern’s system in Georgia, Tennessee, South Carolina and Florida. Southern told FERC the project would provide seamless transportation from interconnections with Transcontinental Gas Pipe Line Co. LLC (Transco) and Elba Express to the shippers’ delivery points in Southern’s Zone 3. The Zone 3 Expansion Project is supported by precedent agreements for firm service with 10 new and existing customers for all the capacity to be created.

To provide incremental service to Zone 3 customers, Southern has entered into a precedent agreement with affiliate Elba Express for 235 Bcf/d of firm capacity. The SNG Zone 3 project is dependent upon the EEC Modification Project. EEC Modification is fully subscribed, and will give shippers access to new markets and supplies, FERC said. “Further, the project will facilitate the bidirectional flow of natural gas on the Elba Express Pipeline and thus enhance flexibility and reliability for new and existing customers.”

In 2012, the Elba Liquefaction Project received authorization from the U.S. Department of Energy to export to free trade agreement (FTA) countries. An application to export to non-FTA countries is pending but is not required for the project to proceed, KMI said.

Last year KMI bought Shell’s equity interest in Elba Liquefaction Co. (see Daily GPI, July 16, 2015); however, earlier this year KMI executives said they were in talks to sell a stake in the

Elba project (see Daily GPI, Jan. 28). On Thursday a KMI spokesman said there was no update on that.