Columbia Buys Pepco's Share of Cove Point, Plans Imports
Ending a partnership in existence since 1994, Columbia's
liquefied natural gas (LNG) subsidiary, Columbia LNG, bought Pepco
Energy Co.'s 50% interest of the Cove Point LNG facility in
Maryland for an undisclosed sum, the companies said last week.
Columbia also announced plans to recommission Cove Point's
mothballed marine terminal to handle imports for the first time in
20 years. The purchase needs Federal Trade Commission approval
under the Hart-Scott-Rodino Act, and Columbia said it hopes to
close the deal by the end of next month and file for
recommissioning the terminal later next year.
Located in Lusby, MD, the Cove Point LNG terminal includes LNG
storage and terminal operations and an 87-mile natural gas
pipeline. The pipeline extends from the Cove Point terminal to
interconnections with gas pipelines in Northern Virginia. It is
able to send out up to 1 Bcf/d. It currently provides peak shaving
services to customers in the Mid-Atlantic and Southeastern regions.
"This is another example of Columbia's strategic focus on
providing flexible and valuable transport options to the rapidly
growing Northeast and Mid-Atlantic natural gas markets," said
Oliver G. Richard III, CEO of Columbia Energy Group. "The plan that
Columbia LNG has developed for the Cove Point terminal is in line
with 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 to
file an application with FERC to reactivate the terminal's marine
facilities, Columbia said. The terminal has been without marine
facilities for the last 20 years, Mike McGarry, a Columbia
Columbia LNG's sole asset is the Cove Point terminal. Columbia
and Pepco have jointly operated it since the partnership bought the
facility in 1994. Currently, there are 32 employees at the plant,
but McGarry said if the marine terminal is approved, that number is
expected to double.
If reactivated, Cove Point would represent the fourth LNG marine
terminal in the Atlantic and Gulf of Mexico. Cabot LNG's Distrigas
facility and CMS' lake Charles facility already import LNG from
overseas, and earlier this year, Sonat filed to reactivate the Elba
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