Blackstone Credit Acquires 49% Interest in U.S. East Coast LNG Infrastructure Asset
Posted on 05/26/2022
On May 20, 2022, Blackstone Credit purchased EIG’s 49% ownership interest in Elba Liquefaction Company, L.L.C. (ELC), a joint venture entity of the Elba Island LNG facility. Kinder Morgan, Inc. (NYSE: KMI) will remain as the operator and retain its 51% ownership of ELC.
ELC is an liquified natural gas (LNG) liquefaction facility located near Savannah, Georgia. ELC began full commercial operations in August 2020 and is comprised of 10 Movable Modular Liquefaction Units with a nameplate capacity of approximately 2.5 million tons per annum of liquefied natural gas (LNG) for export, which is equivalent to approximately 350 million cubic feet (MMcf) per day of natural gas. ELC generates stable cash flow under a 20 year contract (plus extension rights) with an investment grade counterparty, providing long duration income to its owners.
In February 28, 2017, Kinder Morgan sold a 49% interest in ELC to EIG Global Energy Partners (EIG). To acquire its membership interest at the time, EIG has made an upfront cash payment of approximately US$ 385 million, consisting of: a US$ 215 million reimbursement to Kinder Morgan for EIG’s 49 percent share of prior ELC capital expenditures, excluding capitalized interest; and a payment of approximately US$ 170 million in excess of capital expenditures in consideration of the value created by KMI in developing the project to the stage at that point.
Advisors
J.P. Morgan Securities LLC acted as exclusive financial advisor and Milbank LLP served as Blackstone Credit’s legal counsel on the transaction.
Keywords: Blackstone Group LP.