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Cove Point LNG seeks OK to export test cargoes

9 Nov 2017, 5.36 pm GMT

Cove Point LNG seeks OK to export test cargoes

Houston, 9 November (Argus) — Maryland's Cove Point LNG export project today took another step to start operating this year, requesting federal authorization to export test cargoes.

Cove Point owner Dominion asked the US Federal Energy Regulatory Commission (FERC) to approve by 15 November the export of test cargoes from the facility. Cove Point would be the second major operating LNG export terminal in the contiguous US. Louisiana's Sabine Pass facility started exporting in February 2016.

Dominion did not say exactly when it plans to start exporting test cargoes. It told Argus that today's request "is in line with the October 30 earnings call statement regarding producing LNG in November and being in-service by year-end."

Dominion has said that a third party has contracted to provide feed gas for the testing process and to export test cargoes, but it has declined to identify that entity.

FERC previously approved the introduction of all hydrocarbons into the facility necessary to produce LNG, but according to pipeline nominations Cove Point has not yet started receiving natural gas for liquefaction. The test process is expected to be completed in December, allowing the facility to start-long term contractual service before the end of the year to its foreign customers.

Cove Point would have peak production capacity of 5.75mn t/yr, equivalent to 770mn cf/d (8bn m³/yr) of gas, from one liquefaction train. That would increase total US peak capacity to 25.75mn t/yr, as Sabine Pass has completed four trains with combined peak capacity of 20mn t/yr.

Dominion has signed two 20-year take-or-pay capacity deals totaling 4.6mn t/yr. Japanese trading house Sumitomo and Indian state-controlled Gail have each signed up for 2.3mn t/yr. Sumitomo has, in turn, signed 20-year deals to sell most of its supplies to Japanese utilities, with 1.4mn t/yr going to Tokyo Gas and 0.8mn t/yr to Kansai Electric.

The customers at Cove Point are responsible for procuring their own gas and pipeline transport. Most of the gas is expected to come from the Marcellus and Utica shale formations, which are relatively near.

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