With the opening of the Dominion Cove Point LNG LP facility in Maryland, liquefied natural gas imports will double this year, becoming about 5% of total U.S. natural gas supply if fully utilized, according to a report by Lehman Brothers analysts.

Analyst Thomas Driscoll estimated in his LNG report that the opening of the facility, owned and operated by Dominion Resources, will bring Lower 48 liquefied natural gas regasification capacity to about 3 Bcf/d in the last six months of 2003, or about 5% of U.S. supply. The facility received authorization to begin service earlier this month (see Daily GPI, Aug. 19).

“The dual effects of increased LNG imports and falling natural gas production will increase LNG’s share,” said Driscoll, which he estimates will average 1.4 Bcf/d. “We are increasing our 2003 estimate for U.S. LNG imports from 1.3 Bcf/d…as a result of stronger than expected Q2 results and anticipated strong LNG imports to the Cove Point terminal.”

Cove Point and the Trunkline LNG facility in Lake Charles, LA “are the only two existing terminals which have the capability to accept ‘wet gas’…This capability…provides the flexibility to receive gas from different supply resources,” he said. Up to now, wet gas from the Middle East, Asia and Africa have been shipped to the Lake Charles facility.

BP, Royal Dutch/Shell Group, Statoil and Dominion currently hold capacity rights to 250 MMcf/d of the peak daily send out capacity at Cove Point, noted Driscoll. There are no long-term gas supply contracts until 2006, “but each of the capacity holders could either sublet their capacity rights or import spot cargoes” from additional countries not serving the U.S. LNG market, he said.

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