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Dominion: Cove Point liquefaction processes tested, ready for service in 2018

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Dominion: Cove Point liquefaction processes tested, ready for service in 2018

The liquefaction facilities at Dominion Energy Inc.'s Cove Point LNG terminal have been tested and are expected to officially enter commercial service in early 2018, the company said, adding that reports of contract renegotiation with customers are mischaracterized.

Once online, the roughly $4 billion export project will be capable of producing 5.25 million tonnes a year of LNG. The facility has been undergoing commissioning activities and was expected to start commercial operations by the end of 2017.

Cove Point has 20-year contracts with GAIL (India) Ltd. and a joint venture between Japan's Sumitomo Corp. and Tokyo Gas Co. Ltd., and it says it looks forward to commercial operations under the previously negotiated terms.

"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 said in a Dec. 19 release.

Indian oil minister Dharmendra Pradhan reportedly told lawmakers in India on Dec. 18 that GAIL was in talks with Cove Point and Cheniere Energy Inc. to renegotiate the terms of its existing agreements, according to a Reuters story from New Delhi.

India has previously had success in renegotiating LNG contracts. Pradhan in September took to Twitter to announce that the state-run Petronet LNG Ltd. had scored lower prices for LNG from Chevron Corp.'s Gorgon export terminal in Australia. India in 2015 altered a contract for LNG supplied by Qatar's RasGas Co. Ltd.