Cove Point LNG Feedgas Deliveries Drop on Maintenance

After somewhat of a lull in U.S. LNG export growth through much of 2018, demand for feedgas has revved up this fall. Total feedgas deliveries to U.S. LNG export terminals topped 5 Bcf/d for the first time this past weekend, thereby also surpassing exports to Mexico for the first time. All five commercialized liquefaction trains — four at Cheniere Energy’s Sabine Pass and one at Dominion’s Cove Point LNG — are operating at or near full capacity for the first time. Simultaneously, commissioning activity is under way now for four new liquefaction trains, including the initial trains at two new export terminals. This steady gas demand is underpinned by gas pipeline expansions designed to provide more direct and economical connectivity between U.S. producing regions and the export terminals. Today, we continue our blog series looking at feedgas pipeline projects and their effect on feedgas flows, this time with a focus on Dominion’s Cove Point LNG.

The contiguous U.S. natural gas market is on its way to having its second major LNG export terminal and a new source of demand in the Northeast region by the end of the year. Dominion’s Cove Point liquefaction project, located on the Chesapeake Bay in Calvert County, Maryland, last month received approval from the Federal Energy Regulatory Commission (FERC) to introduce fuel gas, signaling the start of commissioning activities, a precursor to start-up activities for the liquefaction train itself. Dominion also last November applied for permission from the Department of Energy to export up to 250 Bcf of LNG during pre-commercial operations starting as early as fourth-quarter 2017, and is awaiting a response. Once operational, the facility, which is located within just a few hundred miles of the Marcellus/Utica shales — will have access to one of the primary southbound pipeline corridors for Marcellus/Utica takeaway capacity and add nearly 0.8 Bcf/d of demand to the Northeast gas market. Today we provide a detailed look at the Cove Point LNG facility.

2019 was supposed to be a milestone year for U.S. LNG exports. And to a degree, it has been. Natural gas pipeline deliveries to liquefaction and export terminals have peaked above 6.5 Bcf/d in the past couple of weeks and averaged about 6 Bcf/d for that period, up nearly 2 Bcf/d from where they started this year and more than twice where they stood at this time a year ago. But the growth has come haltingly as under-construction projects have faced a number of setbacks and delays. Moreover, the longer-term, “second-wave” export projects still in the early stages of development and looking to pass “go” are facing challenges of their own, including global oversupply and collapsed margins. Today, we begin a short series providing an update on where U.S. LNG export demand and new projects stand.