FERC gives green light to Cove Point LNG terminal

The US Federal Energy Regulatory Commission Wednesday affirmed an earlier decision to allow the Cove Point, Md., liquefied natural gas terminal to reopen next year. Williams Cos. Inc. had received FERC approval in October to restart the terminal in May 2002 and expand storage capacity to 7.8 bcf from 5 bcf.

By the OGJ Online Staff

WASHINGTON, DC, Dec. 20 --The US Federal Energy Regulatory Commission Wednesday affirmed an earlier decision to allow the Cove Point, Md., liquefied natural gas terminal to reopen next year.

Williams Cos. Inc. originally received FERC approval in October to restart the terminal next May and expand storage capacity to 7.8 bcf from 5 bcf. But local policy makers' concerns led FERC to hold a closed Nov. 16 meeting with state authorities, US lawmakers, and federal security officials to revisit the issue (OGJ Online, Nov. 14, 2001).

Sen. Barbara Mikulski (D-Md.) led the effort to overturn FERC's earlier decision (OGJ Online, Oct. 12, 2001). She argued residents and local officials feared ships carrying LNG could be hijacked and used to damage the Calvert Cliffs nuclear plant 4 miles from the LNG terminal. Mikulski also urged the Federal Bureau of Investigation and the White House's Office of Homeland Security to stop the LNG terminal from reopening.

Based on additional evidence, the Commission reconfirmed that the LNG terminal will be operated safely in cooperation with the regulatory oversight responsibilities of the U.S. Department of Transportation through its Office of Pipeline Safety. In addition, the arrival and docking of LNG tankers will be subject to the regulatory oversight of the Coast Guard, a branch of the DOT, which also participated in the reopened record, FERC said in a statement.

The commission authorized Cove Point owners to reactivate its existing facilities which include four storage tanks, three 8.45-Mw gas-turbine generators, an offshore LNG receiving pier with two unloading locks, and an 87-mile pipeline which extends from the terminal to an interconnection with facilities owned by Columbia Gas Co.

Cove Point was built in 1974 and later closed due to poor economics. It was used as a gas storage site for a period in the 1980s.

Gas industry officials last month predicted the Bush administration will find that security issues surrounding LNG shipments could be addressed without blocking commerce (OGJ Online, Nov. 19, 2001).

LNG shipments into Boston harbor were temporarily suspended following the Sept. 11 terrorist attacks, but the US Coast Guard later allowed them to resume.

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