A natural gas exporting company has signed deals to ship fuel produced in the United States to India and Japan, according to a report by the Philadelphia Inquirer.
Dominion Resources announced this week that it had secured buyers for natural gas shipped from its proposed liquefied natural gas (LNG) export facility at Cove Point, Md., which is tied directly by pipeline to Pennsylvania's Marcellus Shale gas field, the Inquirer reported. Construction would start in 2014 and the plant would begin shipping LNG in 2017. The project is estimated to cost from $3.4 billion to $3.8 billion.
Gas utilities have been enrolling U.S. customers for gas heat while natural gas prices are relatively low. A steady stream of LNG exports to other countries will increase demand and expose American customers to international natural gas prices, which are as much as six times higher than current U.S. prices.
Gas producers, eager to find new markets, are promoting LNG as a way to improve the nation's balance of trade and to boost domestic job growth, according to the report. Some consumers, including the petrochemical industry, say exports will drive up U.S. natural gas prices. Environmentalists fear harm from more natural gas drilling.
"Dominion's proposal awaits a key license from the Department of Energy to export LNG to non-free-trade nations, which include Japan and India. Dominion's application is third in line out of more than 20 awaiting review by the Energy Department. Most of the plants are on the Gulf Coast," the Inquirer reported.
The Dominion project would add export capability to a 35-year-old plant that was built to import natural gas, the report states. The Inquirer quotes Dominion to say its project would be cost-effective because much of the infrastructure is already built, including the huge insulated storage tanks to contain the LNG at 260 degrees below zero.
"The Cove Point facility, located about 60 miles southeast of Washington on the Chesapeake's western shore, is a monument to the fickleness of natural gas markets," the Inquirer wrote. "It remained open only two years after it opened in 1978 because domestic prices subsided and it no longer made sense to import LNG."
To read the Inquirer article, click here.