Dominion continues Cove Point commissioning work, denies LNG contract talks with India’s GAIL

Cove Point LNG export facility (Image courtesy of Dominion Energy)

Dominion Energy is continuing with final commissioning work at its Cove Point LNG export terminal in Maryland, the second US facility to produce LNG from shale gas, the company said on Tuesday.

Dominion introduced feed gas to the 5.25 mtpa liquefaction facility earlier this month with the first tanker arriving last week for cool-down operations.

“All major equipment has been operated and is being commissioned following a comprehensive round of thorough testing and quality assurance activities,” Dominion said in its latest statement.

The company added it expects to start commercial operations early next year under the terms of previously negotiated 20-year contracts with ST Cove Point, the joint venture of Japan’s Sumitomo Corporation and Tokyo Gas, and with India’s GAIL.

There have been several media reports saying that GAIL has held a number of talks with Dominion to renegotiate the 20-year deal it has with the US company. India has already altered deals for Qatari and Australian LNG supplies as the country is looking to secure better prices for price-sensitive Indian customers.

“The characterization of contract renegotiations is false,” Dominion said.

“Conversations are ongoing with export customers in preparation for beginning commercial operations but there have been no changes in the contract terms since initial contract execution, and Dominion Energy does not intend to renegotiate contract terms in the future,” the company added.

Once in operation, the $4 billion Cove Point facility will be the second US exporter of LNG sourced from shale gas.

To remind, Houston-based LNG export player Cheniere became the first in February last year when its Sabine Pass liquefaction plant shipped its first cargo to Brazil.

 

LNG World News Staff

 

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