Shell US Gas & Power LLC - a subsidiary of
Royal Dutch Shell plc
) - Southern Liquefaction Company, LLC - subsidiary of
Kinder Morgan Inc
) - and a unit of
El Paso Pipeline Partners, L.P.
) announced their plan to jointly form a limited liability
company. The new entity will develop an export-ready natural gas
liquefaction plant at a shipping terminal near Savannah,
Upon corporate and regulatory approvals, the newly formed
company will use El Paso's existing pipeline and terminal
infrastructure to modify its Elba Express Pipeline and Elba
Island LNG Terminal. The developed facility will export liquefied
natural gas (LNG) by ship. A small-scale liquefaction unit of
Shell will be included with the existing Elba Island facility to
facilitate speedy construction.
Per the deal, Kinder Morgan owned El Paso will have a 51%
stake in the new company and operate the facility. Shell
will have the remaining 49% stake and 100% of the liquefaction
capacity. It is estimated that the facility will have a capacity
of 2.5 million tons per year upon completion.
The Free Trade Agreement approval has been sanctioned to the
project and the non-Free Trade Agreement approval is also
expected soon. Management at Shell believes that this deal will
meet the world's growing energy requirement and boost the U.S.
In terms of assets, Royal Dutch Shell owns a strong and
diversified portfolio of global energy businesses that offer
attractive long-term growth opportunities. The group's strong
inventory of development projects and increased capital
expenditures should help volume growth in the long run.
However, Royal Dutch Shell conducts operations in many
countries. As such, the group is exposed to risks associated with
doing business abroad. Such risks include embargoes and/or
expropriation of assets, exchange rate risks, terrorism and
Royal Dutch Shell currently carries a Zacks Rank #3 (Hold),
implying that it is expected to perform in line with the broader
U.S. equity market over the next one to three months. Another oil
) having a Zacks Rank #2 (Buy) is also expected to perform in
line with the market.
EL PASO PIPELIN (EPB): Free Stock Analysis
KINDER MORGAN (KMI): Free Stock Analysis
ROYAL DTCH SH-A (RDS.A): Free Stock Analysis
TOTAL FINA SA (TOT): Free Stock Analysis
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