Ending a partnership in existence since 1994, Columbia’sliquefied natural gas (LNG) subsidiary, Columbia LNG, bought PepcoEnergy Co.’s 50% interest of the Cove Point LNG facility inMaryland for an undisclosed sum, the companies said last week.Columbia also announced plans to recommission Cove Point’smothballed marine terminal to handle imports for the first time in20 years. The purchase needs Federal Trade Commission approvalunder the Hart-Scott-Rodino Act, and Columbia said it hopes toclose the deal by the end of next month and file forrecommissioning the terminal later next year.

Located in Lusby, MD, the Cove Point LNG terminal includes LNGstorage and terminal operations and an 87-mile natural gaspipeline. The pipeline extends from the Cove Point terminal tointerconnections with gas pipelines in Northern Virginia. It isable to send out up to 1 Bcf/d. It currently provides peak shavingservices to customers in the Mid-Atlantic and Southeastern regions.

“This is another example of Columbia’s strategic focus onproviding flexible and valuable transport options to the rapidlygrowing Northeast and Mid-Atlantic natural gas markets,” saidOliver G. Richard III, CEO of Columbia Energy Group. “The plan thatColumbia LNG has developed for the Cove Point terminal is in linewith Columbia’s overall vision for increasing our growth.”

An open season will be held after the acquisition is completed.Based on the results of the open season, Cove Point is expected tofile an application with FERC to reactivate the terminal’s marinefacilities, Columbia said. The terminal has been without marinefacilities for the last 20 years, Mike McGarry, a Columbiaspokesman, said.

Columbia LNG’s sole asset is the Cove Point terminal. Columbiaand Pepco have jointly operated it since the partnership bought thefacility in 1994. Currently, there are 32 employees at the plant,but McGarry said if the marine terminal is approved, that number isexpected to double.

If reactivated, Cove Point would represent the fourth LNG marineterminal in the Atlantic and Gulf of Mexico. Cabot LNG’s Distrigasfacility and CMS’ lake Charles facility already import LNG fromoverseas, and earlier this year, Sonat filed to reactivate the ElbaIsland terminal.

John Norris

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