Kinder Morgan Profit Misses View; To Buy Shell's Stake In Elba LNG JV

(RTTNews) - Kinder Morgan Inc (KMI) on Wednesday reported second-quarter net earnings of $333 million or $0.15 per Class P share compared with $284 million or $0.27 per share last year.

Revenues for the quarter were $3.46 billion compared with $3.94 billion in the prior year.

Analysts polled by Thomson Reuters estimated earnings of $0.19 per share on revenues of $3.96 billion for the quarter. Analysts' estimates typically exclude special items.

The company announced a 14% increase in its quarterly cash dividend to $0.49 per share.

Additionally, the company increased its project backlog of expansion and joint venture investments to $22 billion, an increase of about $3.7 billion from the first quarter.

Separately, Kinder Morgan agreed to buy the entire of Shell (RDS.A, RDS.B)'s equity interest in Elba Liquefaction Co LLC (ELC), the owner of the Elba Liquefaction Project, which is proposed to be constructed and operated at the existing Elba Island LNG Terminal near Savannah, Georgia.

Kinder Morgan currently owns 51 percent of the ELC joint venture and will purchase the remaining 49 percent of the joint venture that it does not already own from Shell.

Kinder Morgan's expected incremental investment resulting from this transaction is about $630 million, bringing its total incremental investment in all the liquefaction and terminal facilities at Elba Island to about $2.1 billion.

Permitting continues for the proposed Elba Liquefaction Project, which consists of 10 small-scale liquefaction units to be purchased from Shell. They will be integrated with the existing Elba Island facility and enable rapid construction compared to traditional large-scale plants.

The next step in the regulatory approval process is for the Federal Energy Regulatory Commission to issue a draft environmental assessment. Subject to regulatory approvals, construction could begin in fourth quarter of 2015, with initial production expected to occur in late 2017.

Under full development, the Elba Liquefaction Project is expected to have a total capacity of about 2.5 million tonnes per year of LNG for export, which is equivalent to about 350,000 Mcf per day of natural gas.