Dominion Cove Point marks progress in LNG export project

Dominion, Richmond, Va., has reached three milestones in its Dominion Cove Point LNG liquefaction project, the company said Apr. 1. The site for the export plant will be at Dominion’s existing LNG import terminal in Maryland on Chesapeake Bay.

The company said it has fully subscribed the marketed capacity of the project with 20-year terminal service agreements with Pacific Summit Energy LLC, a US unit Sumitomo Corp., and with GAIL Global (USA) LNG LLC, a US unit of GAIL (India) Ltd. Each contracted for half the plant’s marketed capacity of 5.25 million tonnes/year.

GAIL is the largest natural gas processing and distributing company in India, Dominion said. Sumitomo in turn announced agreements to serve Tokyo Gas Co. and Kansai Electric Power Co. Inc.

Dominion also has awarded an engineering, procurement, and construction contract for new liquefaction to IHI/Kiewit Cove Point, a joint venture of IHI E&C International Corp., Houston, and Kiewit Corp., Omaha, Neb., following completion of front-end engineering and design.

Finally, Dominion will apply to the US Federal Energy Regulatory Commission for approval to build the $3.4-3.8 billion project. Subject to regulatory approvals, Dominion plans to begin building the plant next year and start up production in 2017.

Dominion’s customers also have signed precedent agreements for service on the 88-mile Cove Point pipeline, which connects the liquefaction site to interstate natural gas pipelines in northern Virginia. They will procure their own natural gas, said Dominion, and deliver it to the Cove Point pipeline.

Dominion will liquefy the gas, store it, and load it into ships brought to the facility on the Chesapeake Bay. Dominion will provide a tolling service and will not take possession of either the natural gas or the LNG.