FERC Thursday upheld its October remand order that allowed Dominion Cove Point LP and Dominion Transmission Inc. to complete an expansion of a liquefied natural gas (LNG) import terminal on Maryland’s eastern shore and associated pipeline facilities, while at the same time barring the delivery of additional regasified LNG volumes to Washington Gas Light’s (WGL) distribution system to shield it from further leaks.

The October remand order was in response to the U.S. Court of Appeals for the District of Columbia Circuit’s decision last July vacating a Federal Energy Regulatory Commission (FERC) order approving the expansion of the LNG terminal and associated pipeline facilities in Pennsylvania and Maryland. The court ruled that the evidence did not support the agency’s conclusion that Washington, DC-based WGL could fix widespread leaks on its distribution system before the terminal expansion went into operation (see Daily GPI, July 21, 2008). WGL claimed that the leaks on its system were caused by regasified LNG from the Cove Point facility.

Responding to rehearing requests of the remand order, FERC Thursday ruled that the October order had appropriately addressed the court’s concern by conditioning operation of the terminal project to prevent additional volumes of regasified LNG associated with the expansion from reaching certain portions of WGL’s system (see Daily GPI, Oct. 8, 2008).

Specifically, the Commission imposed a condition that the expanded Cove Point terminal limit its regasified LNG deliveries from the Cove Point Pipeline into its interconnection with Columbia Gas Transmission Corp.’s system at Loudoun, VA, to a maximum of 530,000 Dth/d [CP05-130, CP05-131].

To ensure compliance with the condition, FERC in its latest order added a requirement that Cove Point LNG report any delivery of regasified LNG at the Columbia-Loudoun delivery point that exceeds 530,000 Dth/d within three days of the occurrence.

The appellate court decision last summer temporarily placed the Cove Point LNG expansion and pipeline facilities in limbo. WGL argued that the coupling leaks on its utility system were caused by unblended regasified LNG from Cove Point. FERC concluded that the leaks occurred because WGL applied hot tar to system couplings when they were installed. The DC appellate court agreed with the Commission, but it nonetheless vacated the agency’s order because it said FERC incorrectly ruled that WGL would be able to fix all of the leaks before the LNG terminal expansion went into service.

In 2006 WGL petitioned the court for review of the FERC order approving the construction of the Cove Point LNG project, which would increase the sendout capacity of the terminal to 1.8 Bcf/d from 1 Bcf/d, and would boost storage capacity to 14.6 Bcf from 7.8 Bcf (see Daily GPI, Aug. 22, 2006).

WGL reported more than 1,600 coupling leaks in 2004 when unblended regasified LNG was introduced into its system in Prince George’s County in Maryland, an area primarily supplied with regasified LNG from Dominion Cove Point. The utility, which serves parts of Virginia, Maryland and Washington, blamed the leaks on the chemical composition of the regasified LNG from Cove Point and sought to block the terminal expansion (see Daily GPI, July 8, 2005).

The expansion of the Cove Point LNG terminal went into operation on New Year’s Day, according to the company, a subsidiary of Richmond, VA-based Dominion Resources (see Daily GPI, Jan. 6). All of the Pennsylvania pipeline facilities associated with the terminal expansion are in service. The 88 miles of 24-inch diameter pipeline extend northward from the new Perulack Compressor Station in Juniata County, PA, to the Leidy Meter Station and pipeline replacement facilities at the Leidy Hub complex in Clinton County, PA. But the Maryland part of the project — 41 miles of 36-inch diameter mostly pipeline loop — has not begun operation.

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