Statoil seeks to expand LNG capacity access at Cove Point

Statoil has signed a letter of intent with Richmond, Va.-based Dominion giving Statoil the right to negotiate a deal for the entire 7.7 billion cu m/year of extra processing and storage capacity Dominion is planning at its Cove Point LNG terminal in Maryland.

Feb. 12, 2004

By OGJ editors

HOUSTON, Feb. 12 -- Statoil ASA has signed a letter of intent with Richmond, Va.-based Dominion giving Statoil the right to negotiate a deal for the entire 7.7 billion cu m/year of extra processing and storage capacity Dominion is planning at its Cove Point, Md. LNG terminal.

If negotiations are successful, Statoil will gain a 20-year lease for this capacity, more than quadrupling its current 2.4 billion cu m/year, which is one third of the LNG processing facilities and storage at Cove Point. The BP Group and Royal Dutch/Shell Group also hold one third each (OGJ Online, Sept. 3, 0203).

Facilities expansion includes two new storage tanks totaling 195 million cu m of extra storage capacity and Cove Point East, a 445-MMcfd expansion of Dominion's 87-mile Cove Point natural gas pipeline in Virginia and Maryland (OGJ, Feb. 2, 2004, p. 58). The new facilities become operational in November 2008.

During 2006-23, Statoil plans to deliver 2.4 billion cu m/year of LNG from its Snøhvit development in the Barents Sea. Until Snøhvit production begins, the group is buying LNG from producers in Algeria and Trinidad and Tobago.