Dominion Resources Inc. (D) announced it has reached three major milestones in its Dominion Cove Point LNG liquefaction project, pushing it to the forefront among proposed North American LNG liquefaction projects.
The company said it has fully subscribed the marketed capacity of the project with signed 20-year terminal service agreements. Pacific Summit Energy, LLC, a U.S. affiliate of Japanese trading company Sumitomo Corporation, and GAIL Global (USA) LNG LLC, a U.S. affiliate of GAIL (India) Ltd., have each contracted for half of the marketed capacity. Sumitomo in turn has announced agreements to serve Tokyo Gas Co. and Kansai Electric Power Co., Inc.
The company noted that it has awarded its engineering, procurement and construction or EPC contract for new liquefaction facilities to IHI/Kiewit Cove Point, a joint venture between IHI E&C International Corporation of Houston and Kiewit Corporation of Omaha, Neb., following completion of the front-end engineering and design (FEED) work. The company stated that it Plans to submit today its application to the Federal Energy Regulatory Commission or FERC for the $3.4 billion to $3.8 billion project. The benefits of this project are expected that up to 4,000 jobs would be produced in the state of Maryland during the construction phase. Benefits to the natural gas and other industries would support another 14,600 jobs once the facility enters service. The project would produce an estimated $9.8 billion in royalty payments to mineral owners over 25 years. And, about $1 billion annually of additional federal, state and local government revenues would be generated directly and indirectly.
The company noted that it plans to start construction on the 5.25-MTPA or million tons per annum facility in 2014 and put the liquefaction facilities in service in 2017.
The company stated that the customers will procure their own natural gas and deliver it to the Cove Point pipeline. The company will liquefy the gas, store it and load it into ships brought to the facility on the Chesapeake Bay. The company will provide a tolling service, and will not take possession of either the natural gas or the LNG.
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