A transport ship carrying the first cargo of liquefied natural gas produced for export departed March 1 from the Dominion Energy Cove Point LNG terminal in Maryland. The $4 billion liquefaction facility is undergoing final commissioning.

Dominion says that all major equipment has been operated and is being commissioned as expected following testing and quality assurance activities.

Shell NA LNG is providing the natural gas needed for liquefaction during the commissioning process and is off-taking by ship the LNG that is produced.

Liquefied natural gas is natural gas that has been cooled to a liquid state, at about negative 260° Fahrenheit, for shipping and storage. The U.S. Energy Department says that the volume of natural gas in its liquid state is about 600 times smaller than its volume in its gaseous state. This process, which was developed in the 19th century, makes it possible to transport natural gas to places pipelines do not reach.

A decade ago, the U.S. expected to be a net importer of natural gas. Hydraulic fracturing opened up new sources of gas, including the prolific Marcellus Basin in Pennsylvania, Ohio and West Virginia. Those new sources rapidly reversed the picture and enabled the U.S. to enter the global market as a major LNG exporter, including other producing nations Qatar and Australia.

Export Capacity Growth

The Energy Information Administration says that as of August 2017, total U.S. natural gas liquefaction capacity in the Lower 48 states increased to 2.8 billion cubic feet per day (Bcf/d) following completion of the fourth liquefaction unit at the Sabine Pass LNG terminal in Louisiana. U.S. LNG exports averaged 1.9 Bcf/d, and capacity utilization averaged 80 percent, based on data through November 2017.

LNG export capacity in the U.S. is growing. Source: Energy Information AdministrationLNG export capacity in the U.S. is growing. Source: Energy Information AdministrationSabine Pass, located on the U.S. Gulf Coast near the Louisiana-Texas border, consists of four existing natural gas liquefaction units, or trains, with a fifth train under construction. When complete, Sabine Pass will have a total liquefaction capacity of 3.5 Bcf/d. EIA says that four additional LNG projects are under construction in the United States, and they are expected to increase total U.S. liquefaction capacity to 9.6 Bcf/d by the end of 2019:

  • Elba Island LNG (10 modular liquefaction trains, 0.03 Bcf/d capacity each) in Georgia is owned by Kinder Morgan. Six trains are scheduled to come online in the summer of 2018, and four trains are scheduled to come online by May 2019.
  • Freeport LNG (three trains, 0.7 Bcf/d capacity each) in Texas is being developed by Freeport LNG Development, L.P. The first train is expected to come online in November 2018, with the remaining two trains following in six-month intervals.
  • Corpus Christi (two trains, 0.6 Bcf/d capacity each) in Texas is being developed by Cheniere and is expected to come online in 2019.
  • Cameron LNG (three trains, 0.6 Bcf/d capacity each) in Louisiana is being developed by Sempra LNG and is expected to come online in 2019.

Asian Markets

When commissioning at Cove Point is complete, the facility will produce LNG for ST Cove Point, a joint venture of Sumitomo Corp. and Tokyo Gas, and for Gail Global (U.S.) LNG, the U.S. affiliate of GAIL (India) LTD under 20-year contracts.

The liquefaction facility is designed to operate 24 hours a day, seven days a week, and has a nameplate capacity of 5.25 mtpa of LNG, equivalent to approximately 8.3 million gallons of LNG per day. Construction began in October 2014.

Dominion Energy holds a portfolio of 26,000 megawatts of electric power generation, 14,800 miles of natural gas transmission, gathering and storage pipeline, and 6,600 miles of electric transmission lines. Dominion also operates one of the nation's largest natural gas storage systems with approximately 1 trillion cubic feet of storage capacity.