LONDON, Mar. 6 -- Algeria's Sonatrach will provide LNG to the US for 15 years starting from 2009 under a binding heads of agreement it signed with StatoilHydro AS.
Sonatrach has secured 2 billion cu m/year of regasification capacity at Dominion's Cove Point, Md., LNG terminal. According to the agreement, StatoilHydro will also buy 1 bcm/year of LNG from 2009 to 2014.
The deal marks Sonatrach's determination to capture the downstream part of the gas chain in the world's largest gas market. Dominion said it wants to boost the capacity so that gas can be delivered to consumers in Mid-Atlantic and Northeastern states that are centers of high demand. StatoilHydro has contracted all of the additional capacity, meaning that starting in 2009, it will have access to capacity of 10 bcm/year (OGJ Online, Feb. 25, 2008).
Sonatrach said the contract was "a considerable advance in the progressive internationalization of Sonatrach" following its access to regas capacity at the Isle of Grain terminal in the UK.
The supplies will underpin Cove Point's expansion that will lift its capacity from 1 bcfd to 1.8 bcfd by fall. Storage capacity will increase from 7.8 bcf to 14.6 bcf with increasing the size of Dominion's Cove Point pipeline in Maryland and adding a pipeline and storage capacity in Pennsylvania.
Contact Uchenna Izundu at email@example.com.