US Expects East Coast LNG in 4Q 2017

Maritime Activity Reports, Inc.

August 10, 2017

Photo: U.S. Energy Information Administration

Photo: U.S. Energy Information Administration

 Dominion Energy has announced that the 750 million cubic feet per day (MMcf/d) Cove Point Liquefaction Project is in its final stages of construction, confirming with EIA that it is 95% complete as of August 2 and expected to be in-service in the fourth quarter of 2017. 

Located on the Chesapeake Bay in Lusby, Maryland, it will be the second large-scale liquefaction export facility to begin operations in the Lower 48 states and the first on the East Coast, said a press statement from U.S. Energy Information Administration.
In addition to construction of the liquefaction terminal, which began in October 2014, this project includes the installation of additional compression at Dominion’s Pleasant Valley compressor station in Fairfax County, Virginia, as well as upgrades to the Cove Point pipeline in Loudon County, Virginia. 
These projects were necessary to allow for sufficient injection of feedstock natural gas from the Marcellus and Utica shale gas plays, which can be supplied by either the Transcontinental pipeline, the Columbia Gas pipeline, or the Dominion Transmission pipeline.
Cove Point is expected to serve as both a liquefied natural gas (LNG) import and export facility. Most activity at the terminal will likely be exporting LNG. While Cove Point has the capacity to send out 1.8 billion cubic feet per day (Bcf/d) of natural gas (about 650 Bcf annually) into the domestic pipeline grid, it only received three cargoes this past winter, totaling 9.3 Bcf. 
In contrast, the LNG export capacity (0.75 Bcf/d nameplate, or an operational capacity of 0.66 Bcf/d after expected maintenance downtime) is fully contracted for 20 years by two companies: Pacific Summit Energy (PSE) LLC, an energy marketing and trading company and a subsidiary of the Sumitomo Corporation in Japan, and GAIL Global (USA) LNG LLC, a subsidiary of GAIL (India) Ltd. Both PSE and GAIL have contracted for about equal shares of the facility’s export capacity.
Two Japanese utilities, Tokyo Gas and Kansai Electric, signed 20-year purchase agreements with PSE’s parent company, Sumitomo, to purchase 1.4 million tonnes per annum (MTPA) (0.20 Bcf/d) and 0.8 MTPA (0.11 Bcf/d), respectively. GAIL’s contract with Dominion is one of more than 30 Master Sales Purchase Agreements (MSPAs) the company has signed with international LNG suppliers. 
In addition to off-taking LNG for use in India’s fertilizer sector and electric power sector, the company also expects to become active in inter-regional LNG trade through its wholly-owned subsidiary company, GAIL Global Singapore Pte, Ltd.
Both PSE and GAIL entered into 20-year purchase agreements for natural gas. PSE signed a 20-year purchase agreement with Cabot Oil and Gas Corporation to purchase 0.34 Bcf/d of natural gas from the Marcellus shale play. Similarly, GAIL has signed a 20-year contract to purchase natural gas from WGL Midstream Inc.
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