Seeking to expand the potential international market for its proposed liquefied natural gas (LNG) export facility in Lusby, MD, Dominion Cove Point LNG Inc. (DCP) has filed an application with the Department of Energy (DOE) for a permit to send LNG to any country with which the United States does not prohibit trade.

Last month DCP said it was seeking authorization from DOE to export domestically produced LNG from the terminal, which is located south of Baltimore, to countries that have free trade agreement (FTA) with the United States (see Daily GPI, Sept. 7). The second phase of the export authorization request seeks authority to export up to 1 Bcf/d to non-FTA countries.

“The current list of FTA countries is very limited, and none of the countries import significant volumes of LNG,” the subsidiary of Richmond, VA-based Dominion said.

Export approval would boost activity at DCP’s terminal, ease constraints on northeastern pipelines and give Marcellus Shale gas producers an additional outlet for their supply, according to the company.

If approved, the increased export capability would provide significant economic benefits over the permit’s 25-year term, including a reduction of the U.S. trade imbalance by at least $2.8 billion annually, and possibly as much as $7.1 billion, DCP said. It would also provide $9.8 billion in landowner royalty income, $22 billion in added government royalties and other revenues to federal, state and local governments, and up to a $40 million annual increase in local property tax revenues in Calvert County, MD, the company said.

Assuming it receives DOE approval, DCP said it expects to begin exports by the end of 2016. DCP said its request is part of a plan to develop, own and operate facilities at its existing LNG import terminal to liquefy domestically produced natural gas and export it to foreign markets. DOE authorization hinges on the Federal Energy Regulatory Commission first giving DCP the go-ahead to construct liquefaction facilities, the company said. Construction of the new facilities could begin in 2014 with an in-service date at the end of 2016, DCP said.

It anticipates entering into one or more long-term (more than two years and up to 25 years) contractual agreements with customers for gas liquefaction and LNG export services. DCP said it does not intend to hold title to the LNG itself and is requesting authorization to act as agent on behalf of other shippers/customers that will hold title to the LNG.

The DCP terminal connects, via its own pipeline, to the major Mid-Atlantic gas transmission systems of Transcontinental Gas Pipe Line, Columbia Gas Transmission and Dominion Transmission.

“The facility is particularly well-situated to export gas production from the prolific Marcellus Shale and promising Utica Shale formations,” said Dominion CEO Thomas Farrell.

Dominion has yet to make a final decision on pursuing the export project “and does not plan to do so until the necessary regulatory approvals, customer commitments and approval by Dominion’s board of directors are received,” the company said Tuesday.

The current spread between U.S. and European/Asian natural gas prices supports export of liquefied domestic gas from the Lower 48, and the Dominion Cove Point LNG import terminal “is well suited” for the addition of liquefaction and export capability to serve Marcellus production, according to a recent analysis by Pan EurAsian Enterprises Inc. (see Daily GPI, Sept. 14). But the overall outlook for LNG export from the Lower 48 is uncertain, according to the report.

©Copyright 2011Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.