Corporate

Dominion Cove Point

Benefitting the economy, helping the community, preserving the environment

Economy Community Environment

The Case for Cove Point Export

Click to enlarge.Click to enlarge.Thousands of jobs. Millions in tax revenue. Continued community partnership and environmental conservation. The case for the Cove Point export project is clear. The benefits both economically and environmentally are real.

For nearly 40 years, Dominion has taken great pride in being a valued member of the Maryland community and a responsible environmental steward. Our commitment to the environment has remained a priority through a conservation management plan which ensures that nearly 90 percent of the site remains pristine and protected.

Our commitment has not changed. The proposed $3.8 billion investment to add natural gas liquefaction and export facilities to the existing site are simply a new phase for Cove Point, one that will significantly benefit the community and the economy.

Support Maryland Sending Clean Energy to the World

Have a question?


Road Construction Improvements at Cove Point

  • Get the latest updates on road improvements that are needed to support Dominion Cove Point's export project. The work will bring long-term safety and efficiency improvements to local traffic conditions.

Significant Benefits

The project will:
  • Be built within the existing footprint and have the smallest environmental footprint of its kind, preserving the 1,000-acre nature preserve that surrounds Cove Point.
  • Produce more than 3,000 construction jobs during the three-year period and create 75 new jobs once in operation.
  • Provide a new long-term revenue stream – in just the first five years after the project is in operation, Calvert County is to receive an additional $40 million a year on average.

Click to view our booklet.Get the Facts About Dominion Cove Point

View/print our fact book about Dominion Cove Point, "Exporting Clean Energy, Importing Prosperity." 

You'll see how surplus natural gas, shipped through the existing Cove Point terminal, can help meet the global demand for cleaner energy and bring $40 million a year in property taxes home to Calvert County.

 


Why Export Liquified Natural Gas

Cove Point locationIncreased natural gas production in the nation has increased supplies in the U.S., and producers are looking for ways to get their natural gas to markets.

Dominion Cove Point’s natural gas pipeline is connected to Dominion Transmission’s interstate pipeline, as well as to other interstate pipelines that have access to the growing natural gas supplies in the region.

Using Dominion Cove Point as an export facility would provide producers with new international markets.

Exportation of liquified natural gas (LNG) uses a local resource, creates new jobs, supplies the increasing demand of natural gas globally and provides energy security to the United States.

Details: Cove Point Liquefaction Project

Overview and Economic Benefits

Overview

Dominion is proposing to construct liquefaction facilities for exporting liquefied natural gas (LNG), at its existing Dominion Cove Point LNG Terminal located on the Chesapeake Bay in Lusby, Md. The proposed liquefaction facilities, combined with existing facilities, will provide a bi-directional service of import and export of LNG at the Dominion Cove Point LNG Terminal. Subject to receipt of regulatory approvals, Dominion plans to start construction on the 5.25-MTPA (million tons per annum) facility in 2014 and put the liquefaction facilities in service in 2017.

Economic Benefits

The benefits of this project are expected to be far-reaching in terms of creating jobs and supporting the local, state and national economy. A study has shown that up to 3,000 jobs would be produced in the state of Maryland during the construction phase. Calvert County, Md., is to receive an additional $45 million a year on average in just the first five years after the project is in operation.

Benefits to the natural gas and other industries would support another 14,600 jobs once the facility enters service. The project would produce an estimated $9.8 billion in royalty payments to mineral owners over 25 years. And, about $1 billion annually of additional federal, state and local government revenues would be generated directly and indirectly. (> Learn more in our 4/1/13 news release.)

Cove Point has been a partner and asset in Calvert Co., Maryland, for more than 30 years. Patrick Nutter, president of the Calvert County Board of County Commissioners, said, "The full Board of County Commissioners welcomes the liquefaction project as a strong complement to our economic development efforts and sincerely appreciates the efforts of Dominion in bringing this outstanding opportunity to fruition."

Operational Overview

While the gas liquefied at Cove Point may be sourced from a wide variety of areas, Cove Point – located on the Chesapeake Bay in Lusby, Md. – will be a premier facility in terms of direct access to the Marcellus and Utica shale plays, two of the most prolific natural gas basins in North America.

The proposed facility would be designed to process an average of 750 million standard cubic feet per day of inlet feed gas. Natural gas-fired turbines at the proposed facility will drive the main refrigerant compressors. The facility also will generate additional power on site to meet the power demands of the liquefaction plant. The liquefaction facilities will connect with the existing facility and share common facilities such as the LNG tanks, pumps, piping and pier in order to support both functions—importing and exporting LNG.

Additional compression on the Dominion Cove Point pipeline would be required to deliver the inlet gas to the Terminal. Dominion proposes to install additional compression at its existing Pleasant Valley Compressor Station in Fairfax County, Va.

Marketed Capacity Fully Subscribed with Signed Service Agreements

Dominion has fully subscribed the marketed capacity of the project with signed 20-year terminal service agreements. Pacific Summit Energy, LLC, a U.S. affiliate of Japanese trading company Sumitomo Corporation, and GAIL Global (USA) LNG LLC, a U.S. affiliate of GAIL (India) Ltd., have each contracted for half of the marketed capacity.

Sumitomo in turn has announced agreements to serve Tokyo Gas Co. and Kansai Electric Power Co., Inc. GAIL is the largest natural gas processing and distributing company in India.

Contract Awarded for Engineering, Procurement and Construction

Dominion has awarded its engineering, procurement and construction (EPC) contract for new liquefaction facilities to IHI/Kiewit Cove Point, a joint venture between IHI E&C International Corporation of Houston and Kiewit Corporation of Omaha, Neb., following completion of the front-end engineering and design (FEED) work.

Proposed Project Facilities

Dominion plans to construct, install, own, operate and maintain certain facilities located in Maryland and Virginia:

  • Calvert County, Md.
    • Liquefaction facilities at the existing Dominion Cove Point LNG Terminal in Lusby, Md.
  • Fairfax County, Va.
    • Add horsepower at existing Pleasant Valley Compressor Station.
  • Loudoun County, Va.
    • Minor upgrades and additional meter runs and/or pipe, fittings and valves.
Working With Dominion

Dominion is committed to working with landowners and other stakeholders to understand and address interests and concerns about the project. The company developed a Stakeholder Involvement & Public Outreach Plan. The company’s goal is to develop a project that provides benefits to natural gas customers and the community. We will work with all governing bodies and the local community to ensure they are aware of our project and updated as it progresses. It is our policy to work via the agencies responsible to ensure that our facility is developed and operated to meet or exceed all safety, environmental, regulatory and legal requirements.

Stakeholders affected by a proposed natural gas project regulated by the Federal Energy Regulatory Commission (FERC or Commission) have certain rights and Dominion works whenever possible to facilitate this process. These rights range from being able to look at project correspondence to becoming an intervener and being able to appeal any FERC decisions in federal court.

These rights include: 

  • Accessing and inspecting all public documents associated with the proposed project; 
  • Making your concerns known in writing to the Commission and its staff; 
  • Participating in informational meetings held in the vicinity of the proposed project area; 
  • Participating in site visits in the vicinity of the proposed project area; 
  • Filing comments on the Environmental Assessments or draft Environmental Impact Statements; 
  • Becoming an intervener or party on a specific proposed project; and 
  • Having the Commission’s decision reviewed in federal court (you must be an intervener to do this).

To learn more, see "Citizens’ Guides" on FERC’s web site at www.ferc.gov or call 1-866-208-3372.

Project Schedule

The process for the project will generally be as follows:

  • June 2012 — FERC Pre-filing Process
  • April 2013 — File FERC Sections 3 and 7 Application

If the Commission Grants Approval:

  • First half of 2014 — Receive FERC Order Issuing Certificate and Granting Section 3 Authority 
  • First half of 2014 — Begin construction of the liquefaction facilities
  • First Quarter 2016 — Begin construction of the Virginia facilities
  • March 2017 — In-service date for the Virginia facilities
  • June 2017 — In-service date for the liquefaction facilities
Environmental Considerations

Natural gas is a clean-burning fuel, preferred for use in homes, factories and commercial buildings. It has become a fuel of choice for electric power generation because it burns cleanly and efficiently.

Dominion works with federal, state and local agencies to design its projects to assure that the impact on the natural and human environment is minimized.

Among the federal programs or regulations that may apply to the project: Clean Water Act (including the National Pollutant Discharge Elimination System program), Clean Air Act, Coastal Zone Management Act of 1972, Endangered Species Act of 1973, National Historic Preservation Act of 1966, Archaeological and Historic Act of 1974, Wild and Scenic Rivers Act, National Wilderness Act, National Parks and Recreation Act of 1978 and Magnuson-Stevens Fishery Conservation and Management Act.

The project also will be reviewed for potential impacts under state and local regulatory programs for environmental issues related to streams, wetlands, threatened and endangered species, air, etc., including programs that implement the federal programs listed above.

As with all of our projects, Dominion will work with the appropriate regulatory agencies and landowners throughout the construction process.

Construction Information

(Portions adapted from information provided by the Interstate Natural Gas Association of America.)

Permits

Prior to construction, Dominion must obtain numerous local, state and federal permits and clearances. The permits address all of our natural resources – land, air, water, vegetation and wildlife, as well as the interests of the general public. Requirements for the Cove Point Liquefaction Project will include: 

State/Federal Agency

Permit or Approval

Federal Energy Regulatory Commission

Order of Authorization

U.S. ACOE, Baltimore District

Section 404 Permit

U.S. ACOE, Baltimore District

Section 10 Permit

U.S. Fish & Wildlife Service

Section 7 Consultation

U.S. Fish & Wildlife Service

Consultation

U.S. Fish & Wildlife Service

Migratory Bird Consultation

U.S. Fish & Wildlife Service

Bald and Golden Eagle Consultation

National Marine Fisheries Service

Section 7 Consultation

National Marine Fisheries Service

Essential Fish Habitat Consultation

Federal Aviation Administration

Notice of Proposed Construction or Alteration

U.S. Coast Guard

Letter of Intent

Department of Defense

Consultation

Department of Energy

Order

Natural Resource Conservation Service

Prime and Unique Farmland Consultation

Maryland Department of the Environment

401 Water Quality Certification

Maryland Department of the Environment

Nontidal Wetlands Permit

Maryland Department of the Environment

Coastal Zone Management Consistency Certification

Maryland Department of the Environment

Waterways Construction Permit

Maryland Department of the Environment

National Pollutant Discharge Elimination System (NPDES) Permit for Stormwater Discharge Associated with Construction Activities

Maryland Department of the Environment

NPDES Permit for Surface Water Discharge (Industrial)

Maryland Department of the Environment

General Discharge Permit for Hydrostatic Testing of Tanks, Pipes

Maryland Department of the Environment

Air Permit

Maryland Department of Natural Resources

Maryland Natural Heritage Program Consultation

Maryland Historical Trust

Section 106 Consultation

Maryland Public Service Commission

Certificate of Public Convenience and Necessity

Maryland State Highway Administration

Commercial/ Industrial/Residential Subdivision Access Permit

Virginia Department of Environmental Quality

Coastal Zone Consistency Certification

Virginia Department of Environmental Quality

Virginia Water Protection Permit

Virginia Department of Environmental Quality

Air Permit

Virginia Department of Game and Inland Fisheries

Fish and Wildlife Coordination Act Review

Virginia Department of Historic Resources

Section 106 Consultation

Virginia Department of Conservation and Recreation

General Permit for Discharges of Stormwater for Construction Activities

Virginia Department of Conservation and Recreation

Virginia Stormwater Management Permit

Exporting from Dominion Cove Point - DOE Approvals

Free Trade Agreement Countries

Dominion Cove Point received authorization on October 7, 2011, from the Department of Energy to enter into contracts to export liquefied natural gas to countries that have free trade agreements with the United States. Dominion had filed for permission on Sept. 1.

Under the authorization, Dominion is permitted to enter into multi-year contracts up to 25 years long with companies wishing to export natural gas to countries with free trade agreements. The authorization is for up to 1 billion cubic feet per day. Dominion would have to add liquefaction equipment at its Cove Point facility to convert natural gas into liquefied natural gas.

Non-Free Trade Agreement Countries

On October 3, 2011, Dominion filed a second application with the Department of Energy. This application requests authorization to export to additional countries (any country with which the U.S. does not prohibit trade) not included in the first application. In this application, Dominion said exports would be in the public’s interest because studies show they could provide an enormous economic stimulus, provide energy price stability, promote the continued development of domestic natural gas and natural gas liquids, create thousands of new jobs in the oil and gas industry, increase tax revenues and improve the balance of trade.

Approval for the second application was received on September 11, 2013.

The current list of non-FTA countries is very limited and none of the countries import significant volumes of LNG.

Economic Benefits

Economic studies filed with the second application show benefits from exports and upstream gas production over the 25-year proposed term could include:

  • A reduction of the U.S. trade imbalance by at least $2.8 billion, and possibly as much as $7.1 billion, annually;
  • A total of $22 billion in added government royalty and other revenues to federal, state and local governments over the 23-year post-construction operating period (2018-2040), an average of $962 million annually. In addition, there would be $9.8 billion in landowner royalty income over the 25-year operating period; 
  • Up to a $40 million annual increase in local property tax revenues in Calvert County Maryland; and
  • About 14,600 permanent jobs during the 23-year post-construction operating period (2018-2040), which are associated with facility operations and upstream natural gas production.

The studies filed with the second application include an economic study of construction and operations completed by ICF International of Fairfax, Va., and market and supply studies completed by Navigant Consulting, Inc. of Rancho Cordova, Calif.

Service

Dominion plans to provide this new service to liquefy the natural gas for its customers. Dominion would not actually own or directly export the LNG. Customers would be responsible for supplying the natural gas to the terminal and then shipping and selling the LNG to foreign entities.

Cove Point Terminal

The terminal's existing import operation has a storage capacity of 14.6 billion cubic feet (BCF) and a daily send-out capacity of 1.8 BCF. The terminal connects, via its own pipeline, to the major Mid-Atlantic gas transmission systems of Transcontinental Gas Pipeline, Columbia Gas Transmission and Dominion Transmission. Dominion acquired Cove Point in Sept. 2002, and began receiving ships the following summer. Learn more about the terminal. 

Safety and Security

As part of our ongoing safety focus at Cove Point, we meet with emergency workers and those who live near our facilities to keep them informed about natural gas and Dominion. Learn more about safety at Cove Point. In addition, Dominion Cove Point has a comprehensive security program and a highly trained security staff that operates state-of-the-art monitoring and detection systems. Learn about security at Cove Point. 

History

The first liquefied natural gas (LNG) plant was built in West Virginia in 1912, and the first commercial liquefication plant was built in Cleveland, Ohio, in 1941. Learn more about the history of liquified natural gas and view our FAQs. In the 1970s, the Consolidated Natural Gas Co. partnered with the Columbia Gas System to build Cove Point to receive, store and process supplies of LNG from Algeria. Learn more about Cove Point's history. 

Additional Resources

Emergency Plan

The Calvert County Emergency Management Office has worked closely with the public safety agencies and Dominion Cove Point to develop emergency response plans in the event of an incident at the Cove Point liquid natural gas facility. These plans, which include emergency response and evacuation procedures, were developed in the event of an on-site, off-site or off-shore accident.

Informational Postings (Escript)

The Dominion Cove Point informational postings include capacity data, gas quality, notices, standards of conduct, tariffs, index of customers, and much more. 

NYSE : (April 17, 2014) D 70.67 -0.86