If you haven’t heard about the expansion Dominion is in the process of performing at Cove Point you have probably been hiding under a rock lately. In any case, and even if you have heard of the project here’s the story.
Cove Point was built in the 1970s and since 2002 has been operated by Dominion. Currently, Dominions business includes taking liquefied natural gas (LNG) from tanker ships, storing it, making the liquid into a gaseous state, and then pushing it into the pipeline that connects to the Mid-Atlantic gas transmissions system.
The new business model is essentially this same thing in reverse. Dominion will take gas from the pipeline, liquefy it, and push it to a tanker at the pier. The tankers will then be on their way to markets around the world. It is planned that an average of only 80 ships will visit each year to collect the LNG. Dominion will not be building any new supply pipelines and will be using their existing infrastructure.
Now that we understand what is going to happen three years from now I’ll cover what’s going on in order to get to this point. Dominion has hired IHI/Kiewit to oversee the construction phase of the project.
The construction project is estimated to cost $3.8 billion dollars. While much of the project requires specialty contractors and union labor there is still plenty of opportunity for local businesses to partake in the process.
IHI/Kiewit has setup a website dedicated to the project, OneCovePoint. This site answers lots of common concerns about the project, it allows business/individuals to register as vendors or sub-contractors, and keeps a list of the upcoming bid opportunities.
Once the initial construction is complete Calvert County stands to benefit greatly in the future. According to the 2013 Calvert County Progress report Dominion pays about 15 million dollars in county taxes. Dominion did negotiate a tax break for themselves for the next several years after LNG operations begin. However, once this reduction expires the county stands to get close to 40 million dollars a year.
What are your thoughts on the Dominion Cove Point LNG expansion project? Leave a comment below.