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Southern LNG Begins Service from Expanded Elba Island Terminal

After receiving the go-ahead from FERC, El Paso Corp. subsidiary Southern LNG last Wednesday began service on an expansion of its Elba Island liquefied natural gas (LNG) import terminal in Georgia.

The so-called Elba II project, which FERC approved in April 2003, adds 3.3 Bcf of storage capacity and boosts the peak sendout rate of the terminal by 540 MMcf/d, bringing total storage capacity to 7.3 Bcf and the sendout capacity to more than 1.2 Bcf/d, according to Southern LNG. The $157 million expansion also includes new docking facilities that can accommodate two LNG tankers at once in a newly constructed slip at Elba Island.

All of the capacity at the Elba Island LNG facility is contracted under long-term agreements, with the pre-expansion capacity contracted to BG LNG Services and the Elba II expansion capacity contracted to Shell NA LNG LLC under 30-year agreements. Shell has indicated it plans to use the LNG to serve key markets in Georgia, Florida and South Carolina.

"The Elba II expansion nearly doubles Elba's size...And we've already begun the regulatory process on our Elba III expansion that will once again double Elba's size with incremental service beginning in 2010," said Jim Yardley, president of El Paso's Southern Pipeline Group. In December, El Paso announced plans to proceed with its Elba III expansion (see NGI, Dec. 26, 2005).

The Elba III expansion of the terminal near Savannah, GA, would increase storage capacity by 8.4 Bcf to 15.7 Bcf, and would raise sendout capacity by 0.9 Bcf/d to 2.1 Bcf/d. These twin "terminal expansions, combined with our new Cypress and Elba Express pipeline takeaway projects -- to be in service in 2007 and 2010 respectively -- [will] provide access to large, diverse supplies of natural gas for all of Georgia and the southeastern United States," he said.

El Paso estimated that its total capital cost for the two Elba terminal expansions and new takeaway pipelines will be nearly $1.3 billion.

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