Dominion signs deal with India for gas exports
Dominion Resources announced an agreement Monday to liquefy up to 2.3 million metric tons of natural gas annually at its planned export terminal in Cove Point, Md., for a U.S. affiliate of GAIL, the largest state-owned natural gas processing and distribution company in India.
Virginia-based Dominion, with offices in Pittsburgh, has booked GAIL Global LNG LLC for half of the 4.6 million metric tons of per annum capacity at the proposed facility for 20 years. The remaining half of the capacity has been sold to a major Japanese firm, Sumitomo.
Dominion hopes to gain all necessary government approvals so it can begin building the liquefaction plant in 2014 and start exporting gas from the current import terminal in 2017. Estimated cost of the proposed facility has risen to between $3.4 billion and $3.8 billion.
“Japan and India are important allies and trading partners of the United States that are in need of secure sources of natural gas, and Sumitomo and GAIL are high-quality companies working to meet those needs,” said Thomas F. Farrell II, chairman, president and CEO of Dominion.
Dominion is one of 25 companies with applications to the federal government to export liquefied natural gas from U.S. terminals, almost all of them along the Gulf Coast. Only Cheniere's application for exports at Sabine Pass in Louisiana near the Texas border has been approved. GAIL has a similar terminal service deal with Cheniere.
If all of the applications pending before DOE were approved, 29.69 billion cubic feet a day of American natural gas — some of it from Marcellus shale fields in Pennsylvania — would be exported overseas, where it is worth more money.
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