June 6, 2018 / 7:29 AM / 5 months ago

Cove Point LNG facility in U.S. set for planned outage in autumn

YOKOHAMA, Japan, June 6 (Reuters) - Dominion Energy Inc’s Cove Point liquefied natural gas production facility in the eastern United States will undergo a brief maintenance shutdown in the autumn, the company’s top executive said on Wednesday.

“It’s not very long,” Dominion’s Chief Executive Officer Thomas Farrell said in an interview, adding the outage could be for less than a few weeks.

Asked whether there would be any interruption in LNG exports from the site on the coast of the state of Maryland, Farrell said that would depend on whether gas storage tanks with capacity to hold nearly 15 billion cubic feet of the commodity were exhausted.

Farrell was in Yokohama to attend a ceremony to celebrate last month’s start of Japanese imports of Cove Point LNG and the arrival of a second Cove Point LNG vessel at a Tokyo Gas terminal on Wednesday morning.

The imports, via a long-term contract, mark a shift in global energy flows as the United States boosts oil and gas exports from shale formations.

A ramp-up of U.S. goods purchases by Japan may draw some of the sting from President Donald Trump’s criticisms of the Asian nation’s trade imbalance with the United States.

The Cove Point facility, with a nameplate annual capacity of 5.25 million tonnes of LNG, has been at full production of LNG from natural gas since April, Farrell said.

“You’ll see a very significant increase in U.S. natural gas coming to Asia and in particular Japan,” he said. “Shale drilling techniques have unlocked probably 200 years ... of natural gas that we will be exporting toward our allies across the world for decades and decades.”

Dominion sold the project’s capacity for 20 years to a subsidiary of GAIL (India) and to ST Cove Point, a joint venture between units of Japanese trading company Sumitomo Corp and Tokyo Gas.

Tokyo Gas has a contract to buy 1.4 million tonnes a year of Cove Point LNG for 20 years, while Kansai Electric Power has contracted to take 800,000 tonnes a year.

There are no plans to build additional trains at the Cove Point terminal because there is no land available, Farrell added.

Asked whether there are any plans for similar LNG export projects elsewhere, he said: “That’s possible, but that would be in the future. We don’t have any present plans to do that”.

Reporting by Osamu Tsukimori Editing by Joseph Radford

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