The Calvert County, MD, Department of Economic Development touted the results of a new study Tuesday showing substantial economic benefits to the local and state economy from a planned expansion of Dominion’s Cove Point LNG terminal.

Dominion is planning to add about 800 MMcf/d of new sendout capacity and another 6.8 Bcf of onsite LNG storage space to the Cove Point terminal on the Chesapeake Bay in Maryland.

The project is expected to bring in 392 new jobs, boosting the region’s annual payroll by an average of $7.9 million during the construction phase and an average of $5.1 million during the operations phase, according to the study, which was prepared by RESI economic research and policy institute — affiliated with Towson University in Towson, MD.

The Cove Point expansion represents a total new investment of $550 million in southern Maryland by Dominion. The project includes increasing the storage and output capacity at the terminal and construction of a new pipeline to make Cove Point gas supplies more available to the growing Mid-Atlantic and Northeastern markets. The pipeline will parallel an existing line through Calvert, Prince George’s and Charles counties. The expansion project is scheduled for completion in 2008.

Dominion currently is adding a fifth 2.8 Bcf LNG storage tank at Cove Point that will be in service in January 2005, bringing LNG storage capacity to 7.8 Bcf. When it purchased all the rights to the plant, Dominion also expanded vaporization to 1 Bcf/d. With the additional expansion planned to accommodate volumes for Statoil, Dominion expects to add two or three more tanks, bringing total storage space to 14.6 Bcf in 2008. It also will expand vaporization to 1.8 Bcf/d.

“We need energy supplies, particularly natural gas, for Maryland’s businesses to continue to compete regionally, nationally and internationally,” said Bob Brennan, assistant secretary of rural Maryland at the Maryland Department of Business & Economic Development. “Expansion at Cove Point can bring a steady supply of natural gas into our region.”

Dominion President Thomas F. Farrell noted that in many cases, natural gas is the “fuel of choice for homes, businesses and power generation. That’s where the LNG brought into Cove Point comes in. As Federal Reserve Chairman Alan Greenspan says, LNG can play a significant role in meeting our nation’s future energy requirements.”

The study predicted the Cove Point expansion would produce an additional $1.2 million in tax revenues annually during construction, while the operations phase would generate an additional $16.7 million per year in tax payments to state and local governments. The tax revenue stream is expected to exceed the cost of the new services governments would have to provide due to the expansion project. RESI forecast a net positive fiscal impact of $91.2 million over the projected life span of the project, including its construction and operations phases.

RESI also forecast that the construction phase would produce an additional $18.3 million annually in regional economic output. The benefits would be even greater once operations began, with an additional $42.8 million in annual economic output.

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