Dominion moves ahead with Md. gas export project

[April 02, 2013]  McLEAN, Va. (AP) -- Hoping to capitalize on a boom in natural gas production, a Virginia-based energy company is submitting a 12,000-page application to federal regulators to build a $3.4 billion plant in southern Maryland to export liquefied natural gas.

Richmond, Va.-based Dominion Resources Inc. also announced Monday it has deals in place with energy companies in Japan and India to buy the gas that would be processed there.

Dominion wants to expand its existing Cove Point plant in Lusby, Md., to produce liquefied natural gas for export. The facility -- already served by 88 miles of pipeline -- would take advantage of the natural gas boom in the mid-Atlantic associated with the Marcellus and Utica shale formations.

Exporting gas allows it to be sold at a much higher price than on the domestic market, where gas is more abundant.

Some consumer advocates have opposed large-scale exportation of natural gas, saying it reduces the domestic supply and therefore increases prices for U.S. customers.

Environmentalists also oppose the plan, fearing harm to the Chesapeake Bay from pollution at the plant and raising concerns about wasted energy in chilling the gas to a liquid for exportation.

More broadly, environmentalists are concerned about the environmental impact from the process by which gas is extracted -- called hydraulic fracturing, or fracking, which involves blasting mixtures of water, sand and chemicals deep underground to stimulate the release of gas.

The Sierra Club sued last year to try to block Dominion's plans for Cove Point, but in January a Maryland judge sided with Dominion. That ruling has been appealed.

Sierra Club spokeswoman Jenny Chang said the organization plans to closely review Dominion's application.

Dominion spokesman Daniel Donovan said that if the Federal Energy Regulatory Commission (FERC) approves Dominion's application, the only other approval it needs is for the Department of Energy to endorse trade deals with Japan and India.

Donovan said Dominion's application puts it toward the front of the line among more than 15 applications nationwide to export liquefied natural gas.

Pending approval, Dominion plans to start construction on the facility next year and begin liquefying gas for export in 2017. The company expects more than 4,000 construction jobs to be associated with the project and more than 180 permanent jobs. Plant construction is expected to cost $3.4 billion to $3.8 billion.

[Associated Press; By MATTHEW BARAKAT]

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