A consortium including subsidiaries of Royal Dutch Shell plc and a Texas oil pipeline company is banding together to export liquefied natural gas from Elba Island, which has an LNG terminal in the Savannah River currently used only for imports.
Shell US Gas & Power LLC and Southern Liquefication Co., a unit of El Paso Pipeline Partners, will invest in pipelines to move natural gas to the terminal and will make modifications enabling the liquefied gas to be pumped onto outbound ships, if the project receives necessary regulatory approvals.
The move comes as new hydraulic fracturing, or "fracking," techniques are enabling access to large reserves of oil and gas previously buried under shale. The influx of supply is shaking up the energy industry globally by lowering costs and reducing U.S. dependence on imported oil.
The project has received U.S. Department of Energy clearance to export up to 4 million tons per year to countries with which the United States has free trade agreements. Last August, the partnership applied to the DOE to export the same amount to non-FTA countries but has yet to receive approval. All told, the new project will have capacity to liquefy 2.5 million tons per year.
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