EIG Global Energy Partners has purchased a 49% interest in the Elba Liquefaction Co. LLC, becoming a joint venture (JV) partner with Kinder Morgan Inc. (NYSE: KMI) in the LNG facility.

“As we have told the market in past months, this JV is another strategic step towards achieving our stated goals of strengthening our balance sheet and positioning the company for long-term value creation,” said Steve Kean, Kinder Morgan president and CEO.

EIG made an upfront cash payment of about $385 million, consisting of reimbursement to Kinder for its 49% share of prior capital expenditures, excluding capitalized interest, and a payment of about $170 million in excess of capital expenditures in consideration of the value created by Kinder in developing the project to this stage.

EIG will fund its share of future capital expenditures necessary to complete construction and commissioning of the liquefaction facility. The total project cost is estimated to be about $1.3 billion, excluding capitalized interest. The project is supported by a 20-year contract with Shell, Kean said.

“This is a tremendous project that builds on our long-standing and extensive experience in LNG and LNG-related infrastructure,” said Wallace Henderson, managing director of EIG. “We are delighted to partner with Kinder Morgan and its outstanding development team to make the Elba Liquefaction Project a reality.”

Initial liquefaction units are expected to be placed in service in mid-2018, with final units coming online by early 2019.

The project received authorization from the Department of Energy in 2012 to export to free trade agreement countries, and authority in late 2016 to export to non-FTA countries. The project is expected to have a total capacity of approximately 2.5 million tonnes per year of LNG for export, equivalent to approximately 350 MMcf/d of natural gas.

Barclays advised KMI during this transaction.