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Dominion Introduces Feed Gas at Cove Point LNG Facility

Dominion Energy Cove Point LNG LP said it introduced feed gas Tuesday into its new liquefied natural gas (LNG) export facility on the Chesapeake Bay in Lusby, MD, as it moves closer to commencing commercial production.

"All major equipment has been operated and is being commissioned as expected following a comprehensive round of testing and quality assurance activities," Dominion said.

Construction of the facility -- which has a nameplate capacity of 5.25 million metric tons per annum (mtpa) of LNG, and would source gas from the Marcellus Shale -- is complete. Dominion said it hopes to have the facility in service this month, and to achieve its first LNG production in mid-January.

In a note to clients Wednesday, analysts with Tudor, Pickering, Holt & Co. said "we believe Cove Point, the second major LNG project, will begin shipping LNG by year-end and when fully operational, in 1Q2018, pushes total export capacity to about 3.4-3.6 Bcf/d."

According to Dominion, Royal Dutch Shell plc subsidiary, Shell NA LNG, is providing feed gas for liquefaction during the commissioning process and will off-take the LNG that is produced. Last month, FERC issued an authorization for Dominion to export LNG produced during commissioning activities via vessel [CP13-113].

Cove Point's marketed capacity is fully subscribed under 20-year service agreements. Pacific Summit Energy LLC, a U.S. affiliate of Japan's Sumitomo Corp., as well as Gail (India) affiliate Gail Global (USA) LNG LLC, have each contracted for half of the marketed capacity. Sumitomo has agreements to serve Tokyo Gas Co. and Kansai Electric Power Co. Inc.

Last August, the company requested permission to introduce feed gas to the facility's pre-treatment and liquefaction areas, and to proceed with setting up equipment for ship loading, including LNG loading pumps and return-gas blowers. The Federal Energy Regulatory Commissiongranted the request in October.

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