US Cove Point receives FERC approval, eyes late 2014 construction

The US Cove Point LNG export facility in Maryland has received Federal Energy Regulatory Commission (FERC) approval, advancing the project closer to construction later this year.

Project developer US-based utility Dominion, which owns the existing import facility in Lusby, Maryland, plans to start construction in late 2014 and start service by June 2017.

The FERC authorisation, announced on 29 September, is the fourth to be issued to an LNG export plant.

The first 18mtpa Sabine Pass facility in Louisiana, now under construction, the planned 13.2mtpa Freeport LNG project in Texas and the 12mtpa Cameron LNG project in Louisiana have all earlier received the permit.

The FERC oversees the siting and construction of LNG facilities, and obtaining the final FERC permits can take up to two years.

The project now must await a notice to proceed from the FERC that will enable construction to start, which is expected to take several weeks. Dominion estimated the project would cost between $3.4bn-3.8bn. Dominion is expected to finance the majority of the project cost itself.

The facility will utilise the existing Cove Point Pipeline to connect to natural gas supplies in the northeast and mid-Atlantic, which would draw from the Marcellus and Utica shale basins.

Cove Point’s single-train volumes are marketed through 20-year, long-term tolling agreements with Japanese trading company Sumitomo and Indian state network operator GAIL with 2.3mtpa each.

The bulk of Sumitomo’s volumes are then designated to Japanese buyers Kansai Electric and Tokyo Gas with 0.8mtpa and 1.4mtpa, respectively.

The total contractual volumes at 4.6mtpa are slightly less than the designated nameplate capacity, which is 5.75mtpa.

Cove Point received its conditional approval to export LNG to countries that do not have free trade agreements (non-FTA) in September 2013 from the US Department of Energy (DOE). India and Japan are both non-FTA nations. The project must still await its final DOE non-FTA approval as well.

Cove Point’s engineering, procurement and construction (EPC) provider is a consortium between US-based companies IHI and Kiewit. Ruth Liao