Kinder Morgan Inc. announced Sept. 27 that it has closed on the sale of a portion of its interest in a liquefied natural gas (LNG) facility in Chatham County, Georgia. The company sold a 25.5 percent equity interest out of its membership interest in Elba Liquefaction Co. LLC (ELC) to an undisclosed financial buyer for approximately $565 million. The transaction is subject to customary purchase price adjustments to reflect an economic effective date of July 1.
These proceeds will reduce short-term debt and create additional capacity for attractive investments, including opportunistic share repurchases. The value of the equity interest implies an enterprise value of approximately $2.3 billion for ELC, which is approximately 13 times 2022 earnings. Upon closing, Kinder Morgan and the undisclosed financial buyer will each hold a 25.5 percent interest and Blackstone Credit will continue to hold a 49 percent interest in ELC. Bracewell LLP served as legal advisor to Kinder Morgan for this transaction. The ELC joint venture was formed in 2017 to construct and own the 10 modular liquefaction units in operation at Elba Island. Kinder Morgan will continue to operate the facility.
“We are pleased to welcome a new partner into the ELC joint venture,” said Kinder Morgan’s Interstate Natural Gas President Kimberly Watson. “Recent geopolitical events have proven how critical liquefied natural gas infrastructure is to meeting global energy demand. We believe this investment further shows the value of LNG and demonstrates the important role it will play for decades to come.”
The Elba Liquefaction facility located on Elba Island in Chatham County, Georgia, is owned by ELC and includes 10 modular liquefaction units for a total capacity of approximately 2.5 million tonnes per year of LNG, which is equivalent to approximately 0.35 billion cubic feet (Bcf) per day of natural gas. ELC then delivers the LNG to Southern LNG Co. LLC (SLNG) for export. Kinder Morgan owns 100 percent of SLNG, which owns and operates the Elba Island LNG Terminal, including the LNG storage tanks and the ship dock for import and export. The facility is supported by a 20-year contract with Shell LNG NA LLC, which is subscribed to 100 percent of the liquefaction capacity.Tags: Elba Liquefaction Co., Kinder Morgan, LNG, mergers and acquisitions