LNG

Blackstone Inc., a private equity fund based in New York, has purchased a 49 percent stake in the US Elba Island LNG export plant in Georgia where Shell is the only customers.

Kinetrex Energy, a company acquired by US pipeline giant and LNG stakeholder Kinder Morgan Inc., has started the construction of three renewable natural gas production facilities to make RNG from waste in the state of Indiana.

The three sites are located at the Twin Bridges Landfill in Danville, the Prairie View Landfill in Wyatt and the Liberty Landfill in Monticello.

Upon completion, they are expected to produce a total of 3.5 billion cubic feet each year of RNG, derived from sources such as organic waste in landfills, wastewater treatment plants and agricultural operations.

By capturing methane produced from the decomposition of organic waste, the RNG production process also reduces or eliminates greenhouse gas emissions.

Kinder Morgan said commercial operations are expected to begin in the fall of 2022, pending required permits and certifications.

The Kinder Morgan Kinetrex unit expects to invest $146 million to construct the RNG facilities, which it will operate to process gas purchased from Wabash Valley Power Alliance (WVPA) Waste Management, owner of the landfills.

WVPA is a not-for-profit electric generation and transmission cooperative based in Indianapolis.

The G&T provides wholesale electricity to 23 retail electric distribution cooperatives in Indiana, Illinois and Missouri.

Collectively, these cooperatives supply electricity to more than 321,000 homes, schools, farms and businesses.

Kinetrex, also based in Indianapolis and which was an affiliate of the Parallel 49 equity fund before being acquired by Kinder Morgan in July 2021, also has an interest in the largest RNG facility in Indiana.

“Once operational next year, total annual RNG production from the for sites is estimated to be over four billion cubic feet,” said KMI.

Assets growth

Houston, Texas-based KMI, which owns an interest in or operates 83,000 miles of US pipelines carrying natural gas oil and other products and 144 terminals, is now participating in what will be a small but very “green” part of its business.

KMI’s US pipeline and storage assets are spread throughout the US and the company is a key supplier of LNG feed gas to exporters of clean energy to Asia as well as being a main stakeholder in the Elba Island LNG export plant in Georgia.

KMI’s Indiana RNG will be sold pursuant to long-term contracts to Kinetrex’s vehicle transportation customers located throughout the eastern half of the US.

“We are pleased to join WVPA, which has a long history in the landfill gas space, on this initiative to bring additional renewable fuels and low-carbon solutions to the marketplace,” said Aaron Johnson, KMI President of Renewable Natural Gas.

“We expect these facilities will produce renewable fuels that will ultimately replace approximately 28 million gallons of traditional diesel each year, lowering GHG emissions by about 280,000 tons,” added Johnson.

“The opportunity to work with Kinetrex has truly created a win-win for our membership,” said WVP Alliance Executive Vice President of Engineering and Operations Brian Fitzgerald.

“As a result of this project, Kinetrex becomes a cooperative member and WVPA’s involvement affords the production of alternative energy resources that will benefit our environment,” added Fitzgerald.

Royal Dutch Shell has pulled out of the Lake Charles LNG export venture in Louisiana being developed with US pipeline and midstream partner Energy Transfer, citing difficult market conditions.

Elba Island LNG, the small US export facility near Savannah in Georgia, was been given permission by regulators to start commercial services from the fifth Train in its Moveable Modular Liquefaction System pioneered by Royal Dutch Shell.

The Federal Energy Regulatory Commission granted a request by US pipeline company Kinder Morgan to start exporting from Train 5 of the 10 completed small-scale Trains.

Elba Island has nameplate output of 2.5 million tonnes per annum and is the smallest of the six US export plants currently on stream. 

The fifth export plant at Cove Point in Maryland, owned by Dominion Energy, and like the Georgia plant located on the Atlantic Coast, is the next smallest with 5.2 MTPA of output.

The other four liquefaction facilities are on the Gulf Coast and are on a larger commcerial scale of up to 27 MTPA. Two are owned by Cheniere Energy at Sabine Pass in Louisiana and Corpus Christi in Texas.

There is also the Sempra Energy-owned Cameron plant in Louisiana and the Freeport plant at Quintana Island in Texas.

Kinder Morgan had initially expected the first Train at Elba Island to come on stream by the end of March 2019 and the remaining Trains following during the year.

However, the project was hit by construction delays and the original start-up day was gradually pushed back with the first cargo being shipped in December 2019.

Using Shell's Movable Modular Liquefaction System meant that the Trains were largely assembled off-site and delivered to Elba Island.

The Georgia project is supported by a 20-year supply contract with Shell, which was one of the original investors.

Kinder Morgan is also building a second LNG export plant at an existing terminal in Mississippi called Gulf LNG in partnership with several equity funds.

That project near Pascagoula has received all FERC approvals.

The existing Gulf import terminal has storage and jetty infrastructure and is to be transformed into a liquefaction plant to produce an initial 11.5 MTPA of LNG for export.

It is located next to the Bayou Casotte Navigation Channel and includes a five-mile send-out pipeline and two LNG storage tanks, each with a capacity of 160,000 cubic metres.

The Elba Island LNG liquefaction plant in the state of Georgia, the sixth US export facility to start up, was expected to load its first cargo after coming on stream in October.

The Royal Dutch Shell LNG carrier “Gemmata” with 138,100 cubic metres capacity was moored at the Elba Island LNG export plant near Savannah in the state of Georgia, the sixth US export plant to come on stream since 2016.