Norway’s Statoil announced that it has signed a non-binding letter of intent to acquire proposed expansion capacity at Dominion Resources’ Cove Point LNG terminal in Maryland. The deal if concluded will allow Statoil to quadruple its current amount of Cove Point capacity under a 20-year agreement.

Dominion already has plans to expand the capacity at the terminal, where LNG is stored and regasified before being piped to customers. The expansion includes two new storage tanks with a total capacity of 6.9 Bcf. Regasification and pipeline capacity for transportation to customers also would increase by an about 750 MMcf/d. The expansion is scheduled to become operational in November 2008.

Statoil already markets one-third of the LNG receipt capacity at the Cove Point terminal, or about 85.76 Bcf/year. Between 2006 and 2023, it expects to deliver that amount annually to the facility from its Snohvit development in the Barents Sea. Until production from the field begins, however, the group is buying LNG from other producers in Algeria and Trinidad and Tobago.

In other Statoil news, Norway’s Norsk Hydro and Statoil announced they terminated merger talks on Tuesday. Statoil also reported a slight drop in net profits for 2003 and the fourth quarter, but said the results were among the best ever because of record production levels.

The state-controlled company said its net profit for the fourth quarter ending Dec. 31 was nearly US$617 million, or 27 cents a share. For the year, Statoil reported a net profit of US$2.38 billion, or US$1.09 a share.

“We are continuing to deliver strong results, including new production records for both oil and gas in the fourth quarter,” said CEO Inge K Hansen. “Greater production than expected, higher oil and gas prices and good results from downstream operations strengthened our income before financial items by comparison with 2002. And we also witnessed a positive currency effect on financial items, although this was considerably smaller than in 2002. This means that our annual result was on a par with the year before.”

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