Cove Point LNG Export Facility Gets US FERC Approval
U.S. federal regulators on Monday approved construction of Dominion Resources Inc's liquefied natural gas export project in Cove Point, Maryland.
Cove Point is the fourth U.S. LNG export project to get the green light to begin construction from the Federal Energy Regulatory Commission. It will be able to export up to 5.75 million metric tons of LNG a year when fully operational.
Dominion's facility is one of about two dozen projects that hope to ship a growing bounty of domestic natural gas to countries in Asia and Europe.
The Cove Point site, a little more than an hour's drive southeast of Washington, D.C. on Chesapeake Bay, boasts four large storage tanks and a pier built in the 1970s to import LNG from Algeria, underscoring just how much U.S. market dynamics have changed.
"We are pleased to receive this final approval that allows us to start constructing this important project that offers significant economic, environmental and geopolitical benefits," said Diane Leopold, president of Dominion Energy.
Construction is estimated to cost between $3.4 billion and $3.8 billion, the company said, adding that it has fully subscribed the marketed capacity of the project with 20-year service agreements that will see LNG shipped to Japan and India.
In the past decade the United States has ridden a wave of hydraulic fracturing, or fracking, to become the world's top gas producer.
FERC said approval came after more than two years of consideration during which the agency heard from more than 140 speakers at three public meetings related to its environmental assessment and received more than 650 comments from the public and federal, state and local agencies on the application.
"The Commission found that the proposal, as mitigated with 79 conditions found in Appendix B of today's order, is in the public interest," FERC said.
The project has been criticized by environmental groups. It lies close to hundreds of homes in the town of Lusby, a golf course and a state park, as well as the complex ecosystem of Chesapeake Bay itself, the largest estuary in the United States.
FERC in May released results of its environmental assessment of Cove Point, showing the facility could be built safely with no significant impact to environment.
FERC has approved three other LNG export projects, all in the Gulf of Mexico: Cheniere Energy's Sabine Pass, the Freeport LNG Development project and Sempra Energy's Cameron facility. Some 14 more projects are pending with FERC with additional applications expected.
Dominion shares closed at $68.48 on the New York Stock Exchange on Monday, up 0.66 percent.
By Ros Krasny
