Introduces feed gas this week: commissioning operations underway
Dominion Energy Cove Point (ticker: D) introduced feed gas into its new LNG facility this week.
The facility has been under design, permitting and construction for the past several years and it is finally undergoing the commissioning process in Lusby, MD. When Cove Point is greenlighted to export liquefied natural gas, it will officially become the second U.S. LNG project to load ships and export LNG abroad.
Commissioning gas coming from Shell
Shell NA LNG (ticker: RDS.A) is providing the natural gas needed for liquefaction during the commissioning process and will off-take the LNG that is produced, Dominion said in a press release.
Dominion said that all major equipment has been operated and is being commissioned as expected, following a comprehensive round of testing and quality assurance activities.
When commissioning is complete, DECP will produce LNG for ST Cove Point, which is the joint venture of Sumitomo Corporation and Tokyo Gas, and for GGULL, the U.S. affiliate of GAIL (India) LTD, under 20-year contracts.
According to The Economic Times, GAIL has agreed to buy 2.3 million tons of LNG per year, for twenty years – this is in addition to the company’s twenty year contract with Cheniere (ticker: LNG), which has GAIL buying up 3.5 million tons per year.
Construction of the liquefaction facility began in October 2014, following more than three years of federal, state and local permit reviews and approvals. With a cost of $4 billion, it is the largest construction project ever thus far for Maryland and for Dominion Energy. Construction has involved more than 10,000 craft workers and a payroll of more than $565 million.
- DECP’s liquefaction facility has a nameplate capacity of 5.25 mtpa of LNG
- Storage capacity of 14.6 billion cubic feet (BCF) and a daily send-out capacity of 1.8 BCF
- The terminal connects, via its own pipeline, to the major Mid-Atlantic gas transmission systems of Transcontinental Gas Pipeline, Columbia Gas Transmission and Dominion Energy Transmission
Poland recently signed a five-year contract for U.S. natural gas sourced from Sabine Pass. For reference, LNG export restrictions were lifted in the FY17 National Defense Authorization Act.
