Williams to buy LNG import terminal
Williams on Wednesday said it would buy 100% of the partnership interests in the Cove Point LNG LP import terminal from Columbia Energy Group for $150 million.
Williams on Wednesday said it would buy 100% of the partnership interests in Cove Point LNG LP from Columbia Energy Group for $150 million.
The partnership owns the Cove Point LNG import terminal at Lusby, Md. Cove Point has a transmission capacity of 1 bcf/d.
The growing demand for clean-burning natural gas, especially in the mid-Atlantic region, "highlights the unique value of the Cove Point facility," said Cuba Wadlington Jr., president and CEO of Williams Gas Pipeline. "This facility is strategically located in one of the fastest growing natural gas markets in the United States."
The Cove Point terminal has substantial untapped synergies with Williams's Transco pipeline system as well, Wadlington noted. Cove Point's 87-mile system crosses the Transco system but isn't connected to it. By adding a new interconnection, the Cove Point terminal "will further enhance Transco's...system flexibility sand reliability," as well as create further expansion opportunities, Wadlington said.
Constructed in the mid-1970s for about $400 million, the Cove Point facility has operated as an LNG peak shaving facility since 1995. The facility has an LNG storage capacity of 5 bcf and a liquefaction capacity of 15 MMcfd. The purchase includes 87 miles of 36-in. diameter pipe interconnected to the Columbia Gas, Consolidated Natural Gas, and Washington Gas Light systems.
Cove Point LNG LP held an open season for a firm LNG tanker discharging service during Feb. 16-Mar. 16. The results of the open season will be announced shortly, said Williams. Pending approval by the Federal Energy Regulatory Commission, Cove Point LNG plans to begin the LNG tanker discharging service by late 2001 or early 2002.
Williams expects the deal to be finalized in July.