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Shell, Kinder Morgan to Export LNG

Shell US Gas & Power LLC (Shell), a subsidiary of Royal Dutch Shell plc, and Southern Liquefaction Company, LLC, a Kinder Morgan company and unit of El Paso Pipeline Partners, L.P. (NYSE: EPB), today announced their intent to form a limited liability company to develop a natural gas liquefaction plant in two phases at Southern LNG Company, LLC’s (Southern LNG) existing Elba Island LNG Terminal, near Savannah, Ga.

Subject to various corporate and regulatory approvals, Shell and Kinder Morgan affiliates have agreed to modify EPB’s Elba Express Pipeline and Elba Island LNG Terminal to physically transport natural gas to the terminal and to load the liquefied natural gas (LNG) onto ships for export.

“Kinder Morgan is delighted to be working with Shell at Elba Island on this project, which has already received Free Trade Agreement approval,” said Kinder Morgan Chairman and CEO Richard D. Kinder.  “This project will facilitate further development of the abundant natural gas resources in the United States and will be a positive factor in the overall balance of trade between the U.S. and other countries.”  Kinder added that the facility anticipates receiving non-Free Trade Agreement approval in due course. 

"This announcement underscores how the abundance of natural gas in the U.S. is changing the energy landscape,” said Marvin Odum, President of Shell Oil Company.  “With a measured, phased approach, exports of cleaner burning natural gas can help meet the world’s rising energy needs while also giving a boost to the U.S. economy.”

Once finalized, EPB, through its affiliates, will own 51 percent of the entity and operate the facility. Shell, through its affiliates, will own the remaining 49 percent and subscribe to 100 percent of the liquefaction capacity.  The project will use Shell’s innovative small-scale liquefaction unit, which will be integrated with the existing Elba Island facility and enable rapid construction compared to traditional large-scale plants.

The total project is expected to have liquefaction capacity of approximately 2.5 million tonnes per year (mtpa) of LNG or 350 million cubic feet of gas per day (Mmcfd). In June 2012, the Elba Island terminal received approval from the U.S. Department of Energy (DOE) to export up to 4 mtpa (500 Mmcfd) of LNG to Free Trade Agreement (FTA) countries. 

In August 2012, the terminal submitted a filing to the DOE seeking approval to export up to 4 mtpa (500 Mmcfd) of LNG to non-FTA countries.  Phase I of the project, approximately 1.5 mtpa (210 Mmcfd), requires no additional DOE approval.

This project combines Shell’s LNG leadership -- from innovative technology to a vast global LNG portfolio and unrivaled access to strategic markets around the world -- with Kinder Morgan’s unparalleled portfolio of U.S. natural gas assets and industry expertise.

As an integrated energy company, Shell has an array of long-term options for natural gas that will broaden the energy mix.  This includes extracting ethane and other natural gas liquids for petrochemicals production; shipping solutions for LNG; and proprietary gas-to-liquids technology to produce fuels, lubricants and chemicals.  

Shell Contacts:

Shell Investor Relations

International - Tjerk Huysinga: + 31 70 377 3996

North America – Ken Lawrence: +1 713 241 1042

Shell Media Relations

USA: + 1 713 241 4544

International, UK, European Press: +44 207 934 5550

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(a) price fluctuations in crude oil and natural gas; (b) changes in demand for the Shell’s products; (c) currency fluctuations; (d) drilling and production results;

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Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended 31 December, 2011 (available at www.shell.com/investor and www.sec.gov - opens in new window). These factors also should be considered by the reader.  Each forward-looking statement speaks only as of the date of this release, January 28, 2013.

Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this release. There can be no assurance that dividend payments will match or exceed those set out in this release in the future, or that they will be made at all.

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