DOE approves Dominion Cove Point LNG exports to non-FTA countries

The US Department of Energy approved Dominion Cove Point LP’s application to export LNG from its terminal in Calvert County, Md., to countries that do not have a free-trade agreement with the US.

Subject to environmental review and final regulatory approval, the facility on Chesapeake Bay received conditional authorization to export as much as 0.77 bcfd for of 20 years, DOE said on Sept. 11. The installation previously received clearance to export LNG to non-FTA countries on Oct. 7, 2011, it noted.

“We agree with DOE’s decision that exports are expected to bring economic benefits to the country,” said Thomas F. Farrell II, chief executive of parent Dominion Resources Inc. “It is good news on many fronts, including the thousands of jobs that will be created, the boost in government revenues that will result, and the support it provides to allied nations.”

Dominion Cove Point’s proposed liquefaction and export operations are expected to cost $3.4-3.8 billion. The company sought approval for them in March from the US Federal Energy Regulatory Commission. Pending receipt of regulatory approval and permits, construction is scheduled to begin in 2014, with a 2017 in-service date.

The installation already has robust infrastructure, including connections to the pipeline grid, LNG storage capacity, and an updated pier. Construction will chiefly entail adding liquefaction capability, Dominion said.

It said the facility’s capacity is fully subscribed, with signed 20-year terminal service agreements. Pacific Summit Energy LLC, a US affiliate of Japanese trading company Sumitomo Corp., and GAIL Global (USA) LNG LLC, a US affiliate of GAIL (India) Ltd., each have contracted for half of the marketed capacity.

Under amendments to the 1920 Natural Gas Act, DOE is required to determine if an applicant’s request to export LNG to a non-FTA country is in the national interest. In Dominion Cove Point’s case, it said it considered the economic, energy security, and environmental impacts, as well as public comments for and against the application and nearly 200,000 public comments related to the associated analysis of the cumulative impacts of increased LNG exports.

Dominion Cove Point is the fourth US LNG terminal to gain DOE approval of exports to non-FTA nations. Sabine Pass Liquefaction LLC, Freeport LNG Expansion LLC, and Lake Charles Exports LLC’s applications were approved earlier. DOE has another 19 non-FTA LNG export applications under review.

Contact Nick Snow at nicks@pennwell.com.

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