Dominion: Sierra Club Will Not Block Cove Point Liquefaction Project (USA)

Dominion said yesterday it is confident that its existing agreement with the Sierra Club and the Maryland Conservation Council permits the company to build a natural gas liquefaction plant proposed for its Cove Point facility in Lusby, Md.

Thomas F. Farrell II, Dominion chairman, president and CEO, said:

“As with any project of this magnitude, we would expect some opposition from various special interest groups. The Sierra Club, which is a party to an agreement restricting activities on portions of the Cove Point property, has previously expressed its opposition to all LNG export facilities.  We have reviewed the regulations and agreements governing the site and are confident we can locate, construct and operate a liquefaction plant at Cove Point. The project can be built within the footprint of the existing facility without amending the agreement involving the Sierra Club and the Maryland Conservation Council. Dominion plans to design, build and operate the facility with minimal environmental impacts.”

Farrell said that by adding on to an existing facility, the Cove Point project would have less environmental impact than other liquefaction projects proposed for greenfield sites. He also noted that the Cove Point facility has been cited many times for its environmental stewardship, such as for the restoration of the 190-acre Cove Point freshwater marsh, a Maryland Natural Heritage Area along Chesapeake Bay.

Dominion announced earlier today it is moving forward with its natural gas liquefaction project at Cove Point. At the end of March, Dominion signed binding precedent agreements with two companies, one of which is Sumitomo Corp., a major Japanese corporation with significant global energy operations. Between the two shippers, the planned project capacity of about 750 million cubic feet per day on the inlet and about 4.5 million to 5 million metric tons per annum on the outlet, is fully subscribed. Construction is expected to begin in 2014, with an in-service date in 2017, pending receipt of necessary approvals, negotiating binding terminal service agreements with the shippers and successful completion of engineering studies.

Economic studies filed with Dominion’s federal approval applications anticipate a number of significant benefits from the project, including:

• An average of 750 construction workers would be employed during three-plus years of construction. There will be between 2,700 and 3,400 jobs associated with the project in Calvert County alone at the peak of construction activity.  Benefits to the natural gas and other industries would support another 14,600 jobs once the shippers begin natural gas exports.
• About $1 billion annually of additional federal, state and local government revenues would be generated directly and indirectly.
• Owners of the natural gas rights would receive an estimated $9.8 billion in royalties from production of natural gas over the life of the project.
• The natural gas exports would lower the U.S. trade deficit by $2.8 billion to $7.1 billion annually.

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LNG World News Staff, April 27, 2012; Image: Dominion