Kinder Morgan Inc. (KMI) has completed the sale of a 25.5% equity stake in Elba Liquefaction Co. LLC (ELC) to an undisclosed buyer for about $565 million, management said Tuesday.
ELC, a joint venture between KMI and Blackstone Credit, owns the 2.5 million metric tons/year Elba Island LNG export terminal in Chatham County, GA.
KMI would continue to operate the liquefied natural gas facility.
Following the sale, KMI and the undisclosed buyer would each hold a 25.5% stake in ELC, with Blackstone controlling the remaining 49%.
Proceeds from the sale “will reduce short-term debt and create additional capacity for attractive investments, including opportunistic share repurchases,” KMI said. The value of the equity interest implies an enterprise value of about $2.3 billion for ELC.
“Recent geopolitical events have proven how critical liquefied natural gas infrastructure is to meeting global energy demand,” said KMI’s Kimberly Watson, interstate natural gas president. “We believe this investment further shows the value of LNG and demonstrates the important role it will play for decades to come.”
Elba Island is supported by a 20-year offtake agreement with a subsidiary of Shell plc.
KMI’s vast pipeline network supplies about 7 Bcf/d or half of LNG feed gas delivered to US export terminals, according to executives.
The firm has another 2.6 Bcf/d of “highly likely” contracts for LNG export projects that have been sanctioned or are likely to be sanctioned soon, management said in July.
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