Corporate

History of Cove Point

LNG tanks at Cove Point In the 1970s, the Consolidated Natural Gas Company, parent of what is now Dominion Transmission, partnered with the Columbia Gas System.

Together, they built Cove Point to receive, store and process supplies of LNG from Algeria.

Cove Point received ship-borne LNG imports from 1978 to 1980. At that time, increased natural gas production in the United States, spurred by wellhead price deregulation under the Natural Gas Policy Act of 1978, reduced the need for LNG imports, which were more expensive relative to the new domestic gas supplies.

Consolidated in 1988 sold its interest in the terminal and the Cove Point pipeline to Columbia. In 1995, Columbia Gas reopened the facility for storage and peak-shaving operations. The facility was used to liquefy, store and distribute domestic natural gas for use in the growing Mid-Atlantic region.

Williams purchased Cove Point from Columbia in 2000. Dominion subsequently purchased Cove Point from Williams in 2002 for $217 million. Growing national demand for natural gas, fueled in part by increasing use of natural gas-fired electrical generation stations, once again has required increased imports of LNG.

Dominion Cove Point received its first LNG shipment in the summer of 2003.
 

Significant Projects

Pier Reinforcement Project: 2009-2011

In January 2011, Dominion completed and placed into service its reinforced offshore platform at Cove Point to accommodate its customers and the recent advances in LNG ship technology. This enables the safe docking, off-loading and departure from the pier of larger-sized LNG vessels now coming into service worldwide.

The pier modifications provide greater flexibility for LNG shippers to acquire and schedule LNG cargoes from a variety of supply sources, and provide American consumers with greater access to worldwide supplies of LNG. An adequate supply of natural gas from LNG delivered to Cove Point can help stabilize energy costs for homes and businesses in the Mid Atlantic and the Northeast United States. This project also enables Dominion Cove Point to compete more effectively for LNG supplies and remain competitive with similar terminals throughout the world.

The modifications allow Dominion Cove Point to receive vessels carrying cargoes of up to 267,000 cubic meters. The previous maximum capacity was 148,000 cubic meters. To the extent that Dominion Cove Point shippers opt to use the larger vessels, they can deliver comparable quantities of LNG using fewer ships; however, even after the pier reinforcement, the terminal is capable of receiving the types of ships that were in use prior to the project.

The Pier Reinforcement Project resulted in:

  • The addition of new breasting and mooring dolphins (the dolphins are the structural features, inclusive of support pilings in the water, needed for the breasting panels and mooring hooks).
  • Addition of about 150 feet to each end of the existing offshore platform.
  • Service platform modifications.
  • Minimal dredging around the platform.
  • Upgrading the docking control system.

The unloading rates of the Cove Point Terminal, as listed in DCP’s FERC Gas Tariff Sheet, are an average of 10,200 cubic meters per hour and a maximum of 12,000 cubic meters per hour. The unloading rates did not change with this project.

Dredging

Dredging was necessary to remove silt that had accumulated around the pier and to add a minimum of 2 feet of under-keel clearance directly around the pier. No ship channel dredging occurred. Dredging was required to allow the new generation of larger ships to berth at the pier.

As part of the project, the dredged material was placed behind a newly-constructed rock revetment near the existing shoreline. This rock revetment and existing shoreline created a cell to place the dredged material. The dredged material was transported and placed between the rock revetment and existing shoreline. The dredged material and shoreline were then planted with new vegetation. This newly-created saltwater marsh provides a barrier to protect the existing Cove Point freshwater marsh. The Cove Point freshwater marsh is a unique ecosystem and is part of the Maryland Natural Heritage Area. Previously, a breach had occurred along the shoreline that allowed Bay water to enter into the freshwater ecosystem.

Regulatory Information

On February 4, 2009, DCP filed an application with the Federal Energy Regulatory Commission (FERC or Commission) for the Pier Reinforcement Project. The project docket number is CP09-60-000. (The filing may be viewed on the Web at http://www.ferc.gov using the "eLibrary" link.) The Commission issued an Order authorizing the Project on July 16, 2009 and a Notice to Proceed with Construction on March 12, 2010. Construction commenced in March 2010, and the project was completed and in service in January 2011.

Expansion Project: 2006-2009

In August 2006, Dominion received approval from the Federal Energy Regulatory Commission to increase the plant's daily output capacity from 1 billion cubic feet (Bcf) per day to 1.8 Bcf per day and expand its storage capacity from 7.8 Bcf to about 14.6 Bcf. One Bcf of natural gas is enough energy for about 3.4 million homes each day.

The expansion project was completed in 2009 and added two storage tanks, bringing the total number at the site to seven, and two electric generating units to the existing three units.

Dominion Cove Point also expanded its pipeline in Maryland to deliver more natural gas to interstate pipeline connections in Virginia. Dominion Transmission built a new pipeline, a pipeline extension, two pipelines parallel to existing lines and two compressor stations in Pennsylvania to move natural gas to customers throughout the Northeast.

These pipeline projects are key to delivering new gas supplies to where they are needed in the Mid-Atlantic and Northeast. The Maryland project brings more winter supplies to the Mid-Atlantic region, and the Pennsylvania projects allows supplies to be stored in the summer and moved to the Northeast for use during the winter.

NYSE : (April 23, 2014) D 71.06 0.19