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After Shipper Withdraws, Cove Point LNG Modifies Pipeline Project

Mark Reishus
August 9, 2019 at 09:47:13 ET
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On Aug. 8, 2019, FERC vacated authorization for Dominion Cove Point LNG LP’s (Cove Point LNG) natural gas pipeline compressor station and appurtenant facilities in Charles County, Maryland, known as the Charles Station; approved related changes in Cove Point LNG’s Eastern Market Access Project’s certificated capacity, costs and rates; and authorized Cove Point LNG to initiate service on the project before construction of one remaining delivery tap is completed.

Cove Point LNG decided not to build the Charles Station after one of the two project shippers, Mattawoman Energy LLC (Mattawoman), withdrew.

As originally proposed, the project would have created 294,000 Dekatherms per day (Dth/d) of incremental firm transportation service to Washington Gas Light Co. (WGL) (150,000 Dth/d) and Mattawoman (144,000 Dth/d). The approved modifications reduce the project’s certificate capacity to 150,000 Dth/d, all of which is subscribed by WGL.

The modifications reduce the project’s estimated construction cost from $146,794,841 to $43,505,752, and Cove Point LNG’s monthly incremental reservation charge for service on the project from $7.8452 per Dth to $3.8903 per Dth. The incremental usage charge is reduced from $0.0256 per Dth to $0.0077 per Dth.

FERC found that the modifications do not alter its initial finding that approval of the project is in the public convenience and necessity.

“Finally, we will grant Cove Point LNG’s request to initiate service on the Eastern Market Access Project’s facilities prior to construction of the second tap for deliveries to WGL if the tap has not been completed prior to the issuance of this order. In all other respects, the findings and directives of the [Jan. 23, 2018 certificate order] are unchanged by this order.”

See ¶608-2: Certificate Proceedings for more information on FERC’s review of proposed natural gas pipeline projects.

Dominion Energy Cove Point LNG LP, Order Amending Certificate and Vacating Certificate Authorization in Part, 168 FERC ¶61,081 (2019) [Docket No. CP17-15-002].

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