OREANDA-NEWS. Kinder Morgan said it expects US regulators to authorize in May construction of the Elba Island LNG export project in Georgia.

Kinder Morgan plans to start construction of the $2bn facility soon after receiving approval from the US Federal Energy Regulatory Commission (FERC) and begin exporting in early 2018, the midstream company said yesterday in a first-quarter earnings call. That could make Elba Island the third LNG export facility to come on line in the contiguous US, after Sabine Pass LNG in Louisiana and Cove Point LNG in Maryland.

FERC in February issued environmental approval for the proposed terminal and associated pipeline expansion and is now gathering comments from other federal agencies with jurisdiction over certain parts of the project. Kinder Morgan chief executive Steve Kean said yesterday that the concerns of other agencies have mostly been addressed and FERC likely will issue a construction license next month.

Although low oil prices have significantly hurt the economics of US LNG exports, Kinder Morgan will build the Elba Island export project because Shell has signed a binding 20-year deal for all the liquefaction capacity, Kinder Morgan has said. Shell will assume the price risk by paying liquefaction fees whether or not it takes LNG.

The facility, which will be built at the site of the existing Elba Island LNG import terminal near Savannah, Georgia, will use 10 modular liquefaction units designed by Shell that will be built off site and transported to the terminal. That will significantly reduce costs and construction time.

The units will have combined baseload capacity of 2.5mn t/yr, equivalent to 350mn cf/d (9.9mn m?/d) of gas, and peak capacity of 4mn t/yr. The initial units will come one in early 2018 and all 10 by the end of 2018, Kinder Morgan has said.

Elba Island will give Shell up to 7.5mn t/yr of US LNG on a contractually guaranteed level, as it has 20-year contracts for up 5.5mn t/yr of supplies from Sabine Pass.

The US Department of Energy (DOE) has authorized Elba Island to export up 4mn t/yr to countries that have free trade agreements (FTAs) with the US, and is considering an application to export the same volume to non-FTA nations.

Kinder Morgan has said the project can be built with only an FTA license, as Shell has customers in FTA nations.

Feed gas would come via the 189-mile (304km) Elba Express pipeline, which runs northwest from the terminal to the Transcontinental Pipeline, along, the Georgia-South Carolina border. It also connects with Southern Natural Gas in Georgia.