FERC on Friday issued a favorable draft environmental review of Dominion Cove Point LP's proposed expansion of its liquefied natural gas (LNG) terminal on the Maryland coast and associated pipeline project, both of which are designed to bolster deliveries of natural gas to the Mid-Atlantic and Northeast markets for both consumption and storage.

"We concluded that if the project is found to be in the public interest and is constructed and operated in accordance with Dominion's proposed mitigation and our recommended mitigation measures, the proposed facilities would have limited adverse impacts," FERC said in the draft environmental impact statement (DEIS) on the Dominion Cove Point LNG expansion and Dominion Transmission Inc. project (CP05-130).

"Several areas of concern were noted with respect to the proposed expansion facilities, and we have made specific recommendations that Dominion would be required to address prior to construction or operation of the new facilities at the LNG terminal site. In addition, we have requested that Dominion re-evaluate the design of the LNG spill containment system to accommodate a larger design spill. The results of Dominion's evaluation will be included in the final EIS," staff said.

The expansion, which is scheduled for 2008, 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. The projects calls for the construction of two new 160,000 cubic meter single-containment LNG storage tanks. 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 would receive up to 200 shipments each year following the construction of the expansion. FERC staff concluded that the risk to the public from an accidental spill "should be considered negligible."

"The proposed facility in Maryland would bring additional winter supplies to the Mid-Atlantic region; and the proposed facilities in Pennsylvania, Virginia, West Virginia and New York would allow additional supplies to be stored in the summer and moved to the Northeast for use during periods of peak need in the winter," according to the DEIS.

Last year, Norway's Statoil signed a contract for 1.05 Bcf/d of the total 1.8 Bcf/d of sendout capacity available after the 2008 expansion project. The remaining 750 MMcf/d of capacity will be owned by Shell, BP and peaking customers.

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