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Kinder Morgan approved to start commercial service at Elba LNG export facility

Highlights

No cargoes have shipped since production began July 17

Nine more trains being built at terminal near Savannah

Houston — US regulators on Monday gave the go-ahead to Kinder Morgan to place the first liquefaction train at its Georgia export terminal into commercial service, amid consistent LNG production at the facility over the last two weeks.

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No commissioning cargoes have shipped from the facility, however, and it remained unclear when the first commercial cargo would be ready to load, now that the terminal appears to be proceeding directly to service under its long-term contract with Shell.

Kinder Morgan expects to be able to book revenue from the facility once it completes certain contractual obligations. In an email, spokeswoman Katherine Hill declined to address questions about the operation of Train 1, the timing of production startup for the other nine trains being built at Elba, and whether there have been any further challenges since earlier snags.

Elba, backed by a 20-year offtake agreement with Shell, is by far the smallest of the existing crop of major US LNG export terminals. It could take as long as 100 days for each of the trains at Elba, with nameplate capacity of around 33 MMcf/d, to fill a standard LNG cargo, S&P Global Platts Analytics data show.

By comparison, a single train at Cheniere Energy's Sabine Pass terminal could fill a standard cargo in just under six days. As of Monday afternoon, there were no unladen LNG tankers with a captain's destination set for the port where Elba is located, according to Platts cFlow vessel-tracking software.

Since LNG production began July 17, there have only been observable gas flows for 66 days. Flows have been up and down, and were nonexistent during a two-week period surrounding Hurricane Dorian's approach toward the US East Coast in early- to mid-September.

The facility has received nearly 1.8 Bcf/d of total gas deliveries since mid-February, according to Platts Analytics data. Feedgas deliveries to the terminal have averaged 28 MMcf/d over the past week, just under Train 1's nameplate capacity of 33 MMcf/d.

Kinder Morgan indicated previously that all 10 trains would be in service by early 2020. Among the questions that Hill declined to address was whether that target has changed.

In a recent letter to the Federal Energy Regulatory Commission, the operator requested approval for the introduction of hazardous fluids to its fourth liquefaction train by October 2. Commissioning procedures on Elba's Trains 2 and 3 continue to progress as hazardous fluids have been introduced and may likely be nearing liquefaction production startups in the coming weeks.

The Elba terminal near Savannah will have a capacity of 2.5 million mt/year when completed. There are five other major LNG export terminals in the US currently operating -- Cheniere's Sabine Pass in Louisiana, and its Corpus Christi Liquefaction in Texas; Dominion Energy's Cove Point in Maryland; Sempra Energy's Cameron LNG in Louisiana; and Freeport LNG in Texas.

Kinder Morgan has proposed building a second LNG terminal in Mississippi, Gulf LNG. That project has received Federal Energy Regulatory Commission approval, though Kinder Morgan's CEO said in July that a final investment decision was a ways off, amid efforts to secure sufficient commercial interest.

-- Harry Weber, newsdesk@spglobal.com

-- Emmanuel Corral, newsdesk@spglobal.com

-- Edited by Christopher Newkumet, newsdesk@spglobal.com