dr martens very Dominion’s export facility begins producing LNG
Dominion announced last Wednesday that its newly constructed $4 billion natural gas liquefaction facility at Cove Point began producing liquefied natural gas Jan. 31.
Construction began in October 2014, and it is now 100 percent completed, though the company is finishing up with the commissioning process, as one flows into another, said Karl Neddenien, Dominion’s media and community relations manager at Cove Point.
During the commissioning stage, Neddenien said the company is doing extensive testing, operating different systems and components for the first time and making sure they function as they should.
The gas needed for the liquefaction process during the commissioning stage is provided by Shell NA LNG, a subsidiary of Royal Dutch Shell, a British Dutch multinational oil and gas company.
The liquefied natural gas produced during the commissioning process will be shipped and delivered via existing pipelines by Shell NA LNG, Neddenien said.
After the commissioning process is completed, the company said it will produce liquefied natural gas for ST Cove Point and GGULL under 20 year, take or pay contracts. ST Cove Point is the joint venture of Sumitomo Corp. affiliate of Gail, a natural gas processing and distribution company in India.
Expected to begin commercial service in early March, the liquefaction facility is designed to produce 5.25 million tons of LNG per year, Neddenien said.
In a release, the company said its construction project has involved more than 10,000 craft workers and a payroll of more than $565 million.
Over the years, Dominion’s project has drawn continuous pushback from some local residents. We Are Cove Point, a Calvert grassroots organization formed in protest to Dominion’s expansion project in Lusby, has led a weekly rally outside of the governor’s residence in Annapolis for eight months, demanding Gov. Larry Hogan (R) order a safety study on Dominion’s Cove Point facility.
Last August, Dominion asked to amend its Certificate of Public Convenience and Necessity. The Maryland Public Service Commission held two hearings last fall and is yet to make a decision on Dominion’s request. The hearings attracted hundreds of attendees and generated much controversy over whether the commission should allow the company to make the amendments it seeks.
Another application Dominion made last year was to renew a permit that allows the company to discharge tens of thousands of gallons of wastewater into Grays Creek. The Maryland Department of the Environment held an informational meeting in May at Calvert Library Prince Frederick.
There are no updates since then, said Michael Richardson Jr., chief of MDE’s industrial and general permits division, Monday.
The permit was set to expire Dec. 31, but it remains valid as Dominion submitted the application and is still waiting for word from the state, Neddenien said.
The PILOT agreement established a payment schedule, which included a one time fee of $25 million for fiscal 2018. Finance and Budget Director Tim Hayden said the $25 million check was received by the county last week.
In addition to the one time payment, the county is slated to get annual payments ranging from $35.8 to $48.8 million over the next five years. The payments were contingent upon the LNG plant being operational by June 30 this year.
Though Neddenien said Dominion has been paying taxes to the county since 2003, Hayden said Dominion’s tax payments have been roughly $15 million annually since 2011 and that those payments will cease when the PILOT expires June 30, 2023. The county projects a $9 million decrease in revenue after that.
Starting July 1, 2023, the county will provide Dominion with a 42 percent tax credit on new and repurposed equipment for nine years. The tax credit period will end June 30, 2032, when the facility becomes taxable at 100 percent of its value, instead of 58 percent.