Kinder Morgan closes on Elba 25% equity sale
New York-listed midstream company Kinder Morgan has sold a 25.5% equity stake in the 2.5mn metric tons/year Elba liquefaction and export plant in Georgia to an undisclosed buyer for around $565mn, the company announced September 27.
Kinder Morgan had owned a 50.1% stake in the $2bn LNG export project, which is supported by a 20-year offtake agreement with Shell for its entire liquefaction capacity. It will use the proceeds from the acquisition for short-run debt reduction and as cash flow for forthcoming investments, including share repurchases.
The acquisition values Elba at roughly 13 times its 2022 EBITDA forecast, or around $2.3bn.
Following the transaction, the undisclosed buyer and Kinder Morgan will each own 25.5% of Elba, while Blackstone Credit will hold the remaining 49% interest.
The $565mn acquisition price is subject to customary adjustments, in line with an economic effective date of July 1, 2022.
Kimberly Watson, interstate natural gas president at Kinder Morgan, said: "We are pleased to welcome a new partner into the [Elba] joint venture.
"Recent geopolitical events have proven how critical liquefied natural gas (LNG) 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.”