Richmond, VA-based Dominion Resources and Norway's Statoil ASA said last Thursday that they have officially broken ground on an expansion project that will increase capacity and storage at the Dominion Cove Point liquefied natural gas (LNG) facility in southern Maryland.

Under the expansion plan, Dominion Cove Point's sendout capacity will expand from 1 Bcf/d to 1.8 Bcf/d, and storage capacity will increase from 7.8 Bcf to 14.6 Bcf. The project includes expanding the Dominion Cove Point pipeline in Maryland and adding a pipeline and storage capacity in Pennsylvania.

Dominion and Statoil recently signed 20-year service agreements for the station expansion and increased pipeline capacity in Maryland and Pennsylvania. The service agreements begin when the expansion is activated. The companies currently expect to complete the project in fall 2008.

Dominion Transmission President Gary L. Sypolt said that while last Thursday marked the official start of construction, the companies "began turning dirt" in August immediately upon receiving approval (see NGI, Aug. 28).

"Dominion Cove Point is a critical cornerstone for our expanding position in the U.S. natural gas market," said Rune Bjornson, Statoil executive vice president. "This facility gives us access to one of the largest and most active markets in the world for natural gas."

The companies noted that the expansion will bring temporary construction and permanent operations jobs to Maryland and Pennsylvania. Economic studies predicted $61.1 million in benefits for Maryland and $48.9 million for Pennsylvania. Currently about 20% of the natural gas imported at Dominion Cove Point serves the needs of Maryland customers.

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