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Williams Seeks to Reactivate, Upgrade LNG Terminal

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.

Susan Parker

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