A second U.S. liquefied natural gas (LNG) export terminal has commenced operations with the departure of LNG tankers filled at the Dominion Energy Inc. Cove Point facility near Lusby, Md.
The 948’x151’ Adam LNG left the Chesapeake Bay terminal Monday, bound for the Suez Canal, Bloomberg reported. Used for years to unload import LNG, the Cove Point location now joins Cheniere Energy’s Sabine Pass, La., facility as the second U.S. export terminal.
On March 1, a Royal Dutch Shell-owned tanker, the Singapore-flagged 951’x158’ Gemmata, sailed for Asia, but diverted to the United Kingdom where LNG prices were better. Shell NA LNG had provided natural gas for liquefaction as Dominion Energy put the plant into final commission, and Shell then took the first load of new LNG for export, according to Dominion Energy officials.
Started as an import facility in the 1970s, Cove Point was also a natural gas storage facility when Dominion Energy applied to federal energy regulators to expand it for gas liquefaction and export in 2013. The company faced stiff local opposition and put $4 billion of new investment into the site, involving 10,000 workers in the largest construction project in Maryland.
Dominion Energy announced April 10 that a planned maintenance outage had been completed and the facility had been ramping up since late March in preparation for the first shipment. The company is producing LNG for ST Cover Point, a joint venture of the Sumitomo Corp. and Tokyo Gas, and for Gail Global (USA) LNG, the U.S. affiliate of GAIL (India) Ltd., New Delhi, India, under 20-year take-or-pay contracts.
Asia is a key market for U.S. exporters, with the widened Panama Canal affording new access from the Gulf of Mexico ports to gas-hungry Japan and India. But as the rerouting of the Gemmata showed, the European market holds promise for exporters of U.S. shale gas, who can offer the United Kingdom and European Union nations a stable alternative source to Russian LNG.