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Coast Guard Issues Favorable Supplemental EA for Cove Point Project

The U.S. Coast Guard on Thursday issued a favorable draft supplemental environmental assessment (EA) that supports the issuance of a "letter of recommendation" (LOR) on the suitability of the Chesapeake Bay waterway to handle the increased tanker traffic associated with the expansion of the Dominion Cove Point liquefied natural gas (LNG) terminal in Cove Point, MD.

"Based on Cove Point's follow-up research, analysis and proposed mitigation measures provided to the Coast Guard to address issues needed to support the LOR, the Coast Guard has preliminarily concluded that the additional LNG vessel traffic associated with the Cove Point LNG expansion project does not pose an undue or significant environmental hazard...for the LNG vessel transit route," the Coast Guard said in a notice of availability published in the Federal Register.

The Coast Guard is seeking public comment on the supplemental EA by April 14. It said it will take into consideration the public comments and the results of the Cove Point EA when preparing the LOR, which will identify the actions and resources that are necessary to make the waterway suitable for increased LNG traffic to the expanded Cove Point terminal.

In August 2005 FERC directed Dominion Cove Point to prepare a water suitability assessment (WSA) for the Coast Guard that would identify credible security threats and safety hazards associated with expanded tanker traffic in the Chesapeake Bay. The company submitted the WSA to the Coast Guard in January 2006 and it was put out for public comment. Based on the comments, the Coast Guard made preliminary recommendations to the Federal Energy Regulatory Commission (FERC) for inclusion in its final environmental impact statement (FEIS) regarding the suitability of the Chesapeake Bay for increased LNG vessel traffic. The FEIS reviewed the environmental impacts of the LNG project, including the potential environmental affects of the Coast Guard approving the waterway as suitable for greater tanker traffic. The FEIS was completed in April 2006.

The Coast Guard said it later discovered that certain issues associated with its issuance of a LOR were not fully addressed in the FEIS, and it directed Dominion Cove Point to provide the information in the draft EA that now supplements FERC's FEIS.

The terminal expansion, which FERC approved in August 2006, would increase the sendout capacity of the Cove Point LNG terminal in Calvert County, MD, to 1.8 Bcf/d from 1 Bcf/d, and would boost storage capacity to 14.6 Bcf from 7.8 Bcf (see NGI, Aug. 28, 2006). The project calls for the construction of two 160,000 cubic meter single-containment LNG storage tanks, bringing the number of tanks at the facility to seven. It also would include 161 miles of mostly 36-inch diameter and 24-inch diameter pipeline in Maryland and Pennsylvania, and associated aboveground facilities in Virginia, Pennsylvania, New York and West Virginia.

The Cove Point LNG terminal currently receives about 90 LNG shipments annually and could potentially receive up to 200 shipments each year when the expansion is completed.

The expansion of the LNG terminal is expected to be completed by the end of the year, said Dominion spokesman Dan Donovan. The company also has asked FERC for the green light to begin constructing some of the pipeline facilities on March 28.

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