DOE approves liquefied natural gas exports by Dominion Cove Point LNG

The U.S. Energy Department announced May 7 that it has issued a final authorization for Dominion Cove Point LNG LP to export domestically produced liquefied natural gas (LNG) to countries that do not have a Free Trade Agreement (FTA) with the United States.

The in-construction Cove Point LNG Terminal in Calvert County, Maryland, is authorized to export LNG up to the equivalent of 0.77 billion standard cubic feet per day (Bcf/d) of natural gas for a period of 20 years. Dominion Cove Point LNG (DCP) is a unit of Dominion Resources (NYSE: D).

The development of U.S. natural gas resources is having a transformative impact on the U.S. energy landscape, helping to improve our energy security while spurring economic development and job creation around the country, DOE noted. This increase in domestic natural gas production is expected to continue, with DOE’s Energy Information Administration forecasting a record average production rate of 72.4 Bcf/d in 2015.

Federal law generally requires approval of natural gas exports to countries that have an FTA with the United States. For countries that do not have an FTA with the U.S., the Natural Gas Act directs the Department of Energy to grant export authorizations unless the Department finds that the proposed exports “will not be consistent with the public interest.”

The Energy Department conducted an extensive, careful review of the Dominion Cove Point LNG applications.  Among other factors, the Department considered the economic, energy security, and environmental impacts and determined that exports at a rate of up to 0.77 Bcf/d for a period of 20 years was not inconsistent with the public interest.

DOE said it will continue to act on applications to export LNG from the lower 48 states after completion of the review required by the National Environmental Policy Act, and when DOE has sufficient information on which to base a public interest determination. During this time, the Department will continue to monitor any market developments and assess their impact in subsequent public interest determinations as further information becomes available. Some critics, including Republicans in Congress, have said DOE is moving too slowly on these applications.

Said the May 7 DOE approval about the Dominion Cove Point project: “DCP states that it will liquefy domestically produced natural gas at its Cove Point LNG Terminal and load the LNG onto tankers for export to foreign markets. DCP intends that the Terminal will be a bi-directional facility with capability to both import and export LNG. Additionally, DCP states that domestic gas can be delivered to the Terminal through DCP’s existing pipeline, which is also bi-directional.

“The proposed Liquefaction Project will be located on approximately 59.5 acres within the existing, fenced 131-acre operating industrial area which, in turn, is located within the more than 1,000 acres of existing Cove Point LNG Terminal property. Such facilities may include an offshore pier (with two berths), insulated LNG and gas piping from the pier to the on-shore Terminal and within the Terminal facility, seven LNG storage tanks, on-site power generation, and control systems.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.