Major Expansion Of Dominion Cove Point
LNG Plant Will Bring Needed Gas Supplies
To Mid-Atlantic, Northeast
Statoil Signs Letter of Intent to Contract New Capacity
at
Chesapeake Bay Facility
RICHMOND, Va. - Dominion (NYSE:D) announced today that it
plans to nearly double capacity at its Dominion
Cove Point liquefied natural gas plant in order to move more natural gas
into high-demand Mid-Atlantic and Northeast markets. The terminal expansion
project includes associated pipeline projects and would be completed late in
2008.
Dominion also said it has signed a letter of intent with a
subsidiary of Statoil ASA (NYSE: STO), a global gas and oil company, to contract
for the new capacity. Under terms of the pending long-term agreement, Statoil
will purchase firm LNG tanker discharge services and related transportation,
as well as downstream firm transportation and storage services.
"High consumer bills and continued price volatility conclusively
demonstrate the need for new supplies of natural gas and more flexible, efficient
transportation systems in the Mid-Atlantic and Northeast regions," said
Thos. E. Capps, Dominion's chairman and chief executive officer. "Together,
Dominion and Statoil are stepping up to meet the need. Statoil will provide
a secure, steady source of natural gas from its sources in Norway and elsewhere.
"Our proposal to expand an existing site is the most
practical and efficient plan of many proposed for our nation so far. It should
rise to the top of the list of proposed LNG projects."
Dominion will ask the Federal Energy Regulatory Commission
to approve an increase in the plant's daily output capacity from 1 billion cubic
feet (Bcf) per day to 1.8 Bcf per day. Storage capacity at the terminal would
increase to approximately 14.6 Bcf. Dominion Cove Point now has 5 Bcf of LNG
tank storage, with another 2.8 Bcf under construction and scheduled to be completed
in 2005.
Two pipeline projects are also proposed. Dominion Cove Point
plans to expand its pipeline in Maryland to deliver more natural gas to interstate
pipeline connections in Virginia. Dominion's interstate pipeline company, Dominion
Transmission, Inc., also plans to build a pipeline and two compressor stations
in central Pennsylvania to move natural gas from its Perulack station in Juniata
County to the Dominion South Point market hub, other interstate pipelines and
the major natural gas storage fields at Leidy in Clinton County, Pennsylvania.
Leidy is a major storage center for natural gas used by markets throughout the
Northeast. Both pipeline expansions will follow the FERC-approved open season
process where other shipper interests may be evaluated.
"These two pipeline projects are a key to getting new
gas supplies to where they are needed in the Mid-Atlantic and Northeast,"
Capps said. "The Maryland project will bring more winter supplies to the
Mid-Atlantic region, and the Pennsylvania project will allow shippers to send
some supplies to Leidy in the summer, store them and then move them to the Northeast
during the winter."
Construction of new LNG storage tanks would begin as soon
as regulatory approval is received and will take about three years to complete.
Construction of the pipelines in Maryland and Pennsylvania will be timed to
go into service no later than at the completion of the new LNG facilities, which
is anticipated to be in late 2008.
Dominion purchased the LNG terminal at Cove Point in 2002
and successfully reopened it in the summer of 2003. The plant is located on
the Chesapeake Bay, south of Baltimore.
Dominion is one of the nation's largest producers of energy,
with an energy portfolio of more than 24,000 megawatts of generation, 6.4 trillion
cubic feet equivalent of proved natural gas reserves and 7,900 miles of natural
gas transmission pipeline. Dominion also operates the nation's largest underground
natural gas storage system with more than 960 billion cubic feet of storage
capacity and serves 5.3 million retail energy customers in nine states. For
more information about Dominion, visit the company's Web site at www.dom.com.
