Williams Seeks to Reactivate, Upgrade LNG Terminal
Williams last week asked FERC for the green light to reactivate and
expand its liquefied natural gas (LNG) import services at its Cove Point
terminal in Lusby, MD, to meet the growing demand on the East Coast.
In its application, Williams proposed reactivating its existing LNG
facilities and import services by April 1, 2002, and building a fifth LNG
storage tank to boost its capacity to 7.8 Bcf. The proposed 850,000-barrel
LNG tank would have a targeted in-service date of Sept. 1, 2003. Williams
has estimated the reactivation/expansion project would cost $103 million.
The expansion would make the Cove Point facility, which Williams purchased
from affiliates of Columbia Energy Group last June for $150 million, the
largest import facility in the United States, with a send-out capacity
of 1 Bcf/d (See NGI, May, 8, 2000). Cove
Point is one of only four LNG import terminals in the nation.
"This project will allow significant volumes of competitively priced
natural gas to be introduced from new supply sources to the Eastern Seaboard,"
said Gary Lauderdale, senior vice president and general manager of Williams's
Transcontinental Gas Pipe Line.
"There is clearly strong market demand for the reactivation of
this terminal, as evidenced by the long-term binding precedent agreements
that have been executed for 100% of the capacity created by the project,"
he noted. Customers have entered into 20-year binding precedent agreements
for the entire 750 MMcf/d of send-out capacity that was offered in a recent
open season, said Lauderdale.
Constructed in the mid-1970s at a cost of $400 million, the Cove Point
facility has operated as an LNG peak-shaving facility, serving customers
in the Mid-Atlantic and Southeast, since 1995. It currently has LNG storage
capacity of 5 Bcf and a liquefaction capacity of 15 MMcf/d. The import
terminal has a send-out capacity of 1 Bcf/d. The facility also includes
an 87-mile, 36-inch diameter gas pipeline that connects with pipelines
owned by Columbia Gas, Consolidated Natural Gas and Washington Gas Light.
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