Dominion Energy's Cove Point liquid natural gas facility begins operation

Dominion Energy Inc.’s $4 billion Cove Point liquefied natural gas terminal in Lusby, Md., has begun commercial operation, the Richmond-based energy giant announced Tuesday.

The plant, a former import-only terminal Dominion converted to a facility that can export as well, “has been ramping up to full production” since March, the company said. Construction began in 2014 after three years of federal, state and local permit reviews.

Karl Neddenien, a Dominion spokesman, said the plant is now operating at its full capacity, producing about 8.3 million gallons of liquefied natural gas per day. The company said a ship carrying the first cargo of liquefied natural gas departed March 1, as the facility underwent final commissioning.

The plant has two customers: ST Cove Point, a joint venture of Sumitomo Corporation and Tokyo Gas, and Gail Global (USA) LNG, the U.S. affiliate of GAIL (India) LTD.

Cove Point liquefies and stores gas procured by those entities, which also provide the ships to carry it from the Chesapeake Bay to the Atlantic, pursuant to 20-year agreements, Neddenien said.

“They provide the gas and take it away,” he said.

Though most of the gas coming to Cove Point is likely from the Marcellus and Utica shale plays, Neddenien compared the gas transmission network to the electrical transmission grid.

“It could be from anywhere,” he said.

However, the natural gas is not intended to come from Dominion’s controversial Atlantic Coast Pipeline, planned to run 600 miles from West Virginia through Virginia and into North Carolina, and which will also connect with the Transco system that runs from the Gulf Coast to New York City.

“Cove Point has existing gas transmission pipeline capacity,” Neddenien said.

The plant remains capable of processing liquefied gas imports, which has happened in the winter, he said.

“It’s bi-directional, which means that regardless of any future changes in market demand, we will be able to operate,” Neddenien said.

The terminal is part of one of the nation’s largest natural gas storage systems, including 14,800 miles of natural gas transmission, gathering and storage pipelines, as well as distribution systems that serve 2.3 million customer accounts in five states.

Cove Point is the largest construction project ever for Maryland and Dominion, the company said in March. Construction involved 10,000 workers and the plant’s permanent workforce is 199.

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