Dominion begins work on Cove Point LNG export project in Maryland

Published October 30, 2014 by Paula C. Squires

Richmond-based Dominion said Thursday that it has begun construction-related activities for the Cove Point Liquefied Natural Gas Export (LNG) project, one of the largest private investments ever in Maryland.

“This is a historic event for Dominion, Maryland and the nation,” Diane Leopold, president of the company's Dominion Energy business unit, said in a statement. “The Cove Point LNG export project will help meet the world's need to move toward cleaner fuels. At the same time, it will provide significant economic benefits in terms of thousands of construction jobs, hundreds of millions of dollars in new tax revenues over the life of the facility and an outlet for some of the nation's surplus natural gas supplies.”

Leopold noted that the project underwent a three-year regulatory review and approval process designed to ensure it meets safety, environmental and other requirements. Numerous federal, state and local agencies and thousands of private citizens participated in the process. More than 60 approvals and permits were required before construction could begin.

“The Cove Point facility has been on the western shore of the Chesapeake Bay as an LNG import terminal for nearly 40 years,” she said. “While we are making a substantial investment to add export capabilities, we intend to keep unchanged our commitment to being a good neighbor and responsible steward of the environment.”

Construction activities include initial preparations for worksite clearing and grading. Activities began earlier this month at two off-site locations: a temporary pier being built on the Pautuxent River to receive barge shipments of large equipment and a temporary location for offices, material staging and parking for project construction workers.

The Cove Point LNG Export project is estimated to cost between $3.4 billion and $3.8 billion and, according to Dominion, will create thousands of skilled construction jobs, 75 permanent jobs and an additional $40 million in annual tax revenue to Calvert County in Maryland. The county today receives $15.7 million a year from the LNG import facility.

The proposed export facility will be within the 131-acre footprint of the existing LNG terminal site. Dominion said no new pipelines or storage tanks are needed at the facility. It is targeted to begin operations in late 2017.

Dominion has subscribed the marketed capacity of the project with 20-year service agreements with several companies. They are ST Cove Point LLC, a joint venture of Sumitomo Corp., a Japanese corporation that is one of the world's leading trading companies; Tokyo Gas Co. Ltd., a Japanese corporation that is the largest natural gas utility in Japan; and GAIL Global (USA) LNG LLC, a wholly owned indirect U.S. subsidiary of GAIL (India) Limited, one of the largest natural gas processing and distributing companies in India.