El Paso Pipeline Partners has agreed to acquire a 51% interest in both Southern LNG Company, L.L.C. and El Paso Elba Express Company, L.L.C. from El Paso Corporation for $810 million. Southern LNG owns the Elba Island liquefied natural gas (LNG) terminal near Savannah, Georgia. El Paso Elba Express Company owns the Elba Express Pipeline which went into service on March 1, 2010. El Paso will continue to own the remaining interests of each company.

"We are delighted to announce the partnership's largest acquisition to date," said Jim Yardley, president and chief executive of El Paso Pipeline Partners. "The addition of the Elba Island LNG terminal and the Elba Express Pipeline broadens the partnership's asset base with two high-quality assets. Almost all of the total revenues from Elba and Elba Express come from monthly demand charges, making them a perfect fit with our partnership's existing steady cash flow profile. In addition, these cash flows are supported by long-term contracts with two of the LNG industry's leading participants."

The Elba Island LNG receiving terminal has 1.8 billion cubic feet (Bcf) per day of send-out capacity and 7.3 Bcf of storage capacity, which is expected to increase to 11.5 Bcf following the commissioning of a new storage tank this summer. The terminal is fully-contracted under agreements with subsidiaries of Shell Oil Company (Shell) and BG Energy Holdings Limited (BG) with an average life of more than 20 years. BG has an option to further expand the terminal to 15.7 Bcf of storage and 2.1 Bcf per day of peak send-out capacity.

Tags: El Paso Corporation