Dominion declares LNG victory for Cove Point


Dominion is declaring a victory of sorts after a judgment that confirms the utility's right to build liquefaction facilities at its Dominion Cove Point facility.

The Circuit Court ruling determined that Dominion Cove Point's agreement with environmental agencies allows it to build liquefaction facilities inside the plant's fenced area and export liquefied natural gas even though the Sierra Club had contended that Dominion needed its permission to build.

The liquefaction project could cost between $2.5 billion and $3.5 billion.

Dominion Cove Point is one of the nation's largest liquefied natural gas (LNG) import facilities. In 2009, Dominion completed an expansion project that increased Cove Point's storage and production capacity by nearly 80 percent.

Although there are vast reserves of natural gas in the U.S., many are not yet available. With natural gas becoming the energy of choice for many Americans, Dominion Cove Point will play an increasingly critical role as demand grows through the next decade.

Reserves in a number of other countries are available and for sale, but the gas has to be transported. The most efficient way to transport natural gas across the ocean is to liquefy it and transport it in specially built ships. Dominion Cove Point is strategically located where it can receive transport vessels, store the LNG onshore, and then transform it back to gas when it is needed to meet demand.

Dominion has received the U.S. Department of Energy's (DOE) permission to act as an agent for liquefied natural gas exports to countries with free trade agreements. Dominion could soon do the same for countries without a free trade agreement.

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