FERC OKs Cove Point LNG test cargoes

The US Federal Energy Regulatory Commission (FERC) today authorized Dominion to export test cargoes from its Cove Point LNG terminal in Maryland.

Dominion asked FERC last week 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 has not said exactly when it plans to start exporting test cargoes. It has said it plans to start producing LNG this month and complete the testing process in December, which would allow Cove Point to start long-term contractual service before the end of the year.

FERC said in today's order that Dominion would need additional approval to place Cove Point into long-term service.

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.

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.