Construction on a $3.4-billion to $3.8-billion facility to liquefy and export natural gas could begin as early as 2014, according to Richmond, Va.-based utility Dominion Resources Inc.
The U.S. Dept. of Energy on Sept. 11 gave conditional approval for Dominion’s Cove Point facilities in Calvert County, Md., to export 770 million cu ft of natural gas a day for 20 years to countries that don't have a free-trade agreement with the U.S.
DOE previously approved Dominion’s application to export to countries with free-trade agreements. Before construction can begin, however, the project must receive approval from the Federal Energy Regulatory Commission based on an environmental review. That could occur some time during the first quarter of 2014, a company spokesman says.
If the project receives the green light from FERC, construction could begin a few months later, with an in-service date of 2017, the company says.
In April, Dominion awarded an engineering, procurement and construction (EPC) contract to a joint-venture team of IHI E&C and Kiewit Energy Co., both based in Houston, to develop the Cove Point LNG facility, located on the Chesapeake Bay in Lusby, Md.
In January, with support from Kiewit but prior to entering the joint-venture partnership, IHI E&C successfully completed the front-end engineering design (FEED) portion of the Cove Point liquefaction project.
DOE seems to be picking up the pace for LNG approvals after lengthy waiting periods.
Dominion's Cove Point is the fourth LNG terminal to receive DOE approval. In May 2011, the agency approved Cheniere's Sabine Pass terminal on the Texas-Louisiana border and, in July, Freeport LNG's Quintana Island, Texas, terminal. On Aug. 7, conditional approval was granted to the Lake Charles, La., terminal.
Industry groups such as the American Petroleum Institute cheered the Sept. 11 announcement.
Erik Milito, API’s director of upstream and industry operations, says DOE’s approval could be a sign the agency is moving more quickly to process the remaining 15 LNG export applications to countries that do not have free-trade agreements with the U.S.
However, Sen. Ron Wyden (D-Ore.), chairman of the Senate Energy and Natural Resources Committee, says that, with the approval of a fourth LNG export terminal, the U.S. is “squarely in the range that experts are saying is the most likely level of U.S. natural-gas exports."
He added, "If DOE approves exports above that range, the agency has an obligation to use the most recent data about U.S. natural-gas demand and production and prove to American families and manufacturers that these exports will not have a significant impact on domestic prices and, in turn, on energy security, growth and employment.”