Press release from Dominion
LUSBY, Md. (Oct. 30, 2014)—Dominion (NYSE: D) has begun construction-related activities for the Cove Point Liquefied Natural Gas Export project, one of the largest private investments ever in Maryland and one designed to deliver significant economic and environmental benefits.
"This is a historic event for Dominion, Maryland and the nation," said Diane Leopold, president of the company's Dominion Energy business unit. "The Cove Point LNG export project will help meet the world's need to move toward cleaner fuels. At the same time, it will provide significant economic benefits in terms of thousands of construction jobs, hundreds of millions of dollars in new tax revenues over the life of the facility, and an outlet for some of the nation's surplus natural gas supplies."
Leopold noted that the project underwent a comprehensive three-year regulatory review and approval process designed to ensure the project meets all safety, environmental and other requirements. Numerous federal, state and local agencies as well as thousands of private citizens participated in the process. More than 60 approvals and permits were required before construction could begin.
"The Cove Point facility has been on the western shore of the Chesapeake Bay as an LNG import terminal for nearly 40 years," she said. "While we are making a substantial investment to add export capabilities, we intend to keep unchanged our commitment to being a good neighbor and responsible steward of the environment."
Construction activities have begun at the LNG terminal with initial preparations for worksite clearing and grading. Activities were initiated earlier this month at two off-site locations, a temporary pier being built on the Pautuxent River to receive barge shipments of large equipment and a temporary location for offices, material staging and parking for project construction workers.
"While it has been talked about for several years, the benefits to the southern Maryland economy will really start to show up in full force as the construction process ramps up in the coming months," Leopold said.
The Cove Point LNG Export project is estimated to cost between $3.4 billion and $3.8 billion and will create thousands of skilled construction jobs, 75 permanent jobs and an additional $40 million in annual tax revenue to Calvert County. The county today receives $15.7 million a year from the LNG import facility.
The proposed export facility will be within the 131-acre footprint of the existing LNG terminal site. No new pipelines or storage tanks are needed at the facility. It is targeted to begin operations in late 2017.
Dominion has fully subscribed the marketed capacity of the project with 20-year service agreements with ST Cove Point, LLC, a joint venture of Sumitomo Corporation, a Japanese corporation that is one of the world's leading trading companies, and Tokyo Gas Co., Ltd., a Japanese corporation that is the largest natural gas utility in Japan; and GAIL Global (USA) LNG LLC, a wholly owned indirect U.S. subsidiary of GAIL (India) Limited, one of the largest natural gas processing and distributing companies in India.
IHI/Kiewit Cove Point, a joint venture between IHI E&C International Corporation of Houston and Kiewit Corporation of Omaha, Neb., is the engineering, procurement and construction contractor for the new liquefaction facilities.
The company began the regulatory approval process in September 2011 with an application to U.S. Department of Energy for permission to export LNG from Cove Point. It initiated proceedings with the Federal Energy Regulatory Commission with a pre-filing in June 2012. The application for approval was submitted in April 2013. The environmental assessment was issued in May 2014, and approval to site, construct and operate the LNG liquefaction and export project came late last month.
Dominion is one of the nation's largest producers and transporters of energy, with a portfolio of approximately 23,600 megawatts of generation, 10,900 miles of natural gas transmission, gathering and storage pipeline and 6,400 miles of electric transmission lines. Dominion operates one of the nation's largest natural gas storage systems with 947 billion cubic feet of storage capacity and serves retail energy customers in 15 states. For more information about Dominion, visit www.dom.com.
This news release includes certain "forward-looking information." Examples include information as to our expectations, beliefs, plans, goals, objectives and future financial or other performance or assumptions concerning matters discussed in this release. Factors that could cause actual results to differ from those in the forward-looking statements may accompany the statements themselves. In addition, our business is influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond our ability to control or estimate precisely, such as estimates of future market conditions, access to and costs of capital, the compliance with conditions associated with regulatory approvals, and the ability to complete planned construction or expansion projects within the terms and timeframes initially anticipated. We have identified and will in the future identify a number of these factors in our SEC Reports on Forms 10-K and 10-Q. We refer you to those discussions for further information. Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made.