Dominion, Statoil Break Ground for Cove Point LNG Expansion

Dominion and Statoil officially broke ground Thursday on an expansion project that will significantly increase capacity and storage at the Dominion Cove Point liquefied natural gas facility in southern Maryland.

"Today we recognize the hard work that led to this ceremony as well as the very bright future for our expansion, the millions of customers that will benefit from this new source of natural gas and our partnership with Statoil," said Dominion Transmission President Gary L. Sypolt. "While this day marks the official start of construction, we began turning dirt in August immediately upon receiving approval. This expansion means Cove Point will continue to provide clean, reliable, affordable energy for Southern Maryland and the region."

"Dominion Cove Point is a critical cornerstone for our expanding position in the U.S. natural gas market," said Rune Bjornson, Statoil executive vice president. "This facility gives us access to one of the largest and most active markets in the world for natural gas."

Dominion and Statoil recently signed 20-year service agreements for the station expansion and increased pipeline capacity in Maryland and Pennsylvania. The service agreements begin when the expansion is activated. Work is scheduled for completion in fall 2008.

Dominion Cove Point's capacity will expand from 1 billion cubic feet a day to 1.8 Bcf per day, and storage capacity will increase from 7.8 Bcf to 14.6 Bcf. The project includes expanding the Dominion Cove Point pipeline in Maryland and adding a pipeline and storage capacity in Pennsylvania.

The expansion will bring temporary construction and permanent operations jobs to Maryland and Pennsylvania. Economic studies predicted $61.1 million in benefits for Maryland and $48.9 million for Pennsylvania. Currently about 20 percent of the natural gas imported at Dominion Cove Point serves the needs of Maryland customers.