Dominion Signals Delay in Cove Point Start-up; Contract Related?

For months Dominion’s top brass has signaled that the country’s newest LNG export facility, Cove Point (situated along the coast of Maryland), would begin full commercial operations “by the end of this year” (see Dominion 3Q17: Cove Point LNG Coming Online, ACP Permits in Dec). That has now changed to “early next year”–which is a disappointment. Earlier this month Dominion began the commissioning process, where they use already-chilled LNG (from a tanker) to cool down the equipment, prior to running regular natural gas through it for the first time (see Dominion Cove Point LNG Export – Dress Rehearsal Begins). It appears the commissioning process to check out all of the equipment and to make triple sure everything is OK is taking longer than Dominion expected. The delay, along with a Reuters story, has given rise to rumors that Dominion’s signed-on-the-dotted-line customer from India is getting cold feet and attempting to renegotiate their long-term, 20-year contract. Dominion says, in so many words, that’s hogwash. Dominion says the slight delay in beginning full commercial operations has nothing to do with “contract renegotiations” and everything to do with a “comprehensive round of thorough testing and quality assurance activities.” However, the Reuters article quotes an Indian official as saying they have held a “number of discussions…for re-negotiation of the contracts.” Is contract renegotiation really the reason for Cove Point’s delayed start?…

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