By OGJ editors
HOUSTON, Sept. 3 -- The Dominion Cove Point LNG terminal in Lusby, Md., has received its first commercial cargo of LNG in 23 years. BP Group subsidiary BP Energy delivered about 130,000 cu m of LNG from Trinidad and Tobago to Dominion Resources Inc.'s dock in southern Maryland aboard the Berge Boston tanker Aug. 22. The cargo ultimately will be regasified into 2.9 bcf of natural gas.
"Needed new supplies of natural gas have begun arriving in Maryland, just in time for winter," said Thomas E. Capps, Dominion's chairman and CEO. "This is the beginning of regular shipments that will add to the nation's energy security." A company spokesperson told OGJ that initial shipments would arrive every 10 days, but the company plans soon to bump that up to every 4 days.
Dominion had received a commissioning cargo July 25, and the company received approval from the Federal Energy Regulatory Commission to reopen the terminal for commercial cargos Aug. 18, affirming an earlier FERC decision to allow the terminal to reopen this year (OGJ Online, Dec. 20, 2001).
Dominion Cove Point is the nation's largest LNG import facility, with a sendout capacity of 1 bcfd of natural gas, enough to serve the daily energy needs of 3.4 million homes.
Dominion has invested $180 million to reactivate the Cove Point, Md., LNG facility since its September 2000 acquisition of terminal owner Cove Point LNG LP, which it purchased from Tulsa-based Williams Cos. Inc. for $217 million (OGJ Online, July 7, 2003). The company refurbished the import facilities, added new unloading arms, upgraded control systems, installed new vaporizers, and improved safety and security systems. In addition, Dominion has started construction on a new 2.5 bcf storage tank, scheduled for service in January 2005.
"We knew businesses and consumers in the Mid-Atlantic (area) needed new supplies to keep the economy moving and homes warm this winter," said Capps. "Our staff and over 500 contract workers worked long hours to bring Dominion Cove Point to commercial status in less than a year."
In addition to the BP Group, Dominion will process LNG for two other shippers—Royal Dutch/Shell Group and Statoil ASA—each of which holds a one-third access to LNG processing facilities and storage as well as capacity on Dominion Cove Point's 87-mile pipeline.
The pipeline connects with three major interstate pipelines in northern Virginia—Dominion Transmission Inc., Columbia Gas Transmission Corp., and Transcontinental Gas Pipe Line Corp. Through those connections, natural gas can flow to major markets throughout the Mid-Atlantic as well as to traditional underground storage fields.
Statoil deliveries
Statoil ASA received its first cargo of LNG at the Cove Point terminal Tuesday. The delivery, acquired as a spot purchase from Spain's Repsol-YPF SA, will be regasified into 80 million cu m of natural gas.
"It represents a milestone for our LNG business in the USA and marks the start of sales with this commodity in this important market," said Otto Granli, Statoil's vice-president for LNG sales and shipping.
Originally El Paso Global LNG had agreed to buy 2.4 billion cu m/year of LNG to be delivered from Snøhvit field in the Barents Sea during 2006-23, but the Cove Point LNG LP group has assumed that purchase contract, and Statoil signed a separate agreement with El Paso Merchant Energy last year that also gives it the right to one third of Cove Point's import capacity over 20 years (OGJ, June 30, 2003, p. 64).
The group is due to receive an additional spot cargo later in September from another supplier. Final negotiations also are under way for long-term LNG deliveries to the facility.
"These will secure supplies until. . .Snøhvit. . .comes on stream in 2006," said Granli.