From the time Dominion Cove Point received approval from the Federal Energy Regulatory Commission (FERC) in October 2014 for its LNG export plant in Maryland, the company expected to put the facility into operation in late 2017. The company is still on target for that date and on budget for the export plant. And the company has been under the radar in achieving those goals.
The facility will have two liquefaction trains producing 5.25 million metric tons of LNG per year. The trains will liquefy an average of 0.75 billion cubic feet per day (Bcf/d). There are seven storage tanks with a capacity of 14.6 Bcfe. The terminal will be bi-directional with a regasification capacity of 1.8 Bcf/d.
The two “50%” trains gives the company more operational flexibility. When there is a problem if there is only a single train, the entire facility is out of service. With two trains there is an opportunity for greater flexibility.
The plant capacity is fully subscribed with two 20-year terminal service agreements (TSAs) with 1) a joint venture of Sumitomo Corp. and Tokyo Gas, and 2) the U.S. affiliate of GAIL (India) Ltd. These TSAs are different than agreements at other U.S. LNG facilities.
“We are truly the middle man. We provide the liquefaction, storage and ship loading as part of the contract. The customers have the right and obligation to find the gas supply. They’re buying the supply wherever and transporting on pipes to get it here. Once it gets to our inlet valve, we take over with our services. Once [the LNG] is on a vessel, and the vessel departs, they can take it anywhere in the world they want,” Mike Frederick, vice president of LNG operations for Dominion Cove Point LNG told DownstreamBusiness.com.
“The key is the 20-year, fixed-price contracts that are not based on any commodity pricing. In the industry, there’s always some speculation about what happens if LNG prices drop or what will happen to liquefaction facilities, etc. But ours are fixed-price, long-term deals,” he emphasized.
With the facility’s proximity to Europe, it would seem like a natural fit for European companies. But at the time Dominion Cove Point began marketing its project worldwide in 2011, Sumitomo and Gail were the two companies that stepped up with interest. After receiving FERC approval there was a ton of interest from companies worldwide, especially Europe. But it was the Asian companies that were interested first, he explained.
Cove Point has several advantages over other regasification terminals that are adding liquefaction. One advantage is that no additional tankage was needed for this project.
“The original facility was put into service in 1978 with four tanks with a total capacity of 5 Bcfe. On Sept. 5, 2002, a reactivation project was underway, which included adding a fifth tank with a capacity of 2.8 Bcfe. We did an expansion project with Statoil in 2008 and that added two larger tanks with a total capacity of 6.8 Bcfe. Statoil turned back the capacity,” Frederick said. “So we didn’t need any additional tanks.”
In 2011 the company did a pier reinforcement project that extended the pier by 150 feet in each direction and dredged the location for additional draft. The pier can handle the Q-Max LNG carriers with a capacity of 267,000 cubic meters.
Dominion Cove Point has offered peakshaving services since 1995 and will continue to provide those services. Primary customers are Washington Gas Light Co., Atlanta Gas Light Co., Virginia Natural Gas Co. and Public Service Co. of North Carolina.
“It’s a relatively small service, but we’re continuing that service. When it’s cold like it is today, it’s a very good supply to have available,” Frederick continued.
Dominion Cove Point is strongly focused on safety. The engineering, procurement and construction contractor—IHI/Kiewit Cove Point—reached a major safety milestone with 1.8 million man-hours of work without a recordable injury.
“It’s a very impressive feat. We’re focused on safety and proud of that success,” Frederick concluded.
Scott Weeden can be reached at firstname.lastname@example.org.