Cove Point LNG Ships First Marcellus Cargo to Japan

LNG Sakura

Last week MDN reported that a ship called Adam had departed the Cove Point LNG facility in Maryland with the very first shipment of Marcellus molecules (see First-Ever Shipment of Marcellus LNG Leaves Cove Point, Maryland). Although the first shipment of Marcellus LNG was/is owned by Japan, the destination for the cargo was/is still unknown. The second shipment, ever, of Marcellus LNG from Cove Point left port yesterday–also owned by Japan. However, the ship’s manifest indicates this second shipment IS heading to Japan…
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Va. Water Bd Wants More Assurances re MVP & ACP Pipeline Projects

In October 2017, the Federal Energy Regulatory Commission (FERC) approved two important Marcellus/Utica pipeline projects–Dominion Energy’s Atlantic Coast Pipeline (ACP), and EQT Midstream’s Mountain Valley Pipeline (MVP) (see FERC Approves Atlantic Coast, Mountain Valley Pipeline Projects). ACP is a $6.5 billion, 594-mile natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina. MVP is a $3.5 billion, 303-mile natural gas pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. However, as we’ve all learned the hard way, federal approval by FERC is only the first step. Individual states get a very limited say in pipeline project siting by being given the power to issue federal Clean Water Act permits for stream crossings. Some states, like New York, abuse the power and attempt to shut down federal projects. Other states, like Virginia, waffle around. Here’s the latest from Virginia. The state Dept. of Environmental Quality (DEQ) decided last year to let the federal Army Corps of Engineers handle the water permitting for the two pipelines. But then the state Water Control Board (WCB) stepped in, claiming they have authority to help regulate the construction of these two federal projects (which they don’t, but that’s a story for another day). The WCB eventually approved MVP and conditionally approved ACP. However, under extreme pressure (bullying) from Big Green proponents, the WCB is rethinking their approvals and has “cracked the door open” to review the water crossings already approved by the Army Corps of Engineers. Yeah, it’s a hot mess in Virginia…
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Half of India’s Contracted US LNG Won’t End Up in India

MDN brought you the great news earlier this week that late Sunday night the very first shipment of Marcellus LNG had left the dock at Cove Point, Maryland (see First-Ever Shipment of Marcellus LNG Leaves Cove Point, Maryland). We still don’t know where the first shipment will end up. In the world of Big Energy and LNG, sometimes the destination isn’t known until the ship is under way! The first shipment is owned by Japan. Between Japan and India, all of the Marcellus LNG produced at Cove Point is spoken for (i.e. contracted) for the next 20 years. However, that does not mean all of that LNG will end up in Japan or India. Far from it. Both countries are wheeler dealers, swapping LNG cargoes from around the world. Japan decided it could get LNG from a closer-to-home source and so has swapped/sold the first Marcellus Cove Point shipment to someone else (we’ll tell you who when we find out). It’s likely going to be the same for the first shipment owned by India. We recently spotted the following article from India which says HALF of India’s U.S. contracted LNG–from both Cheniere Energy along the Louisiana Gulf Coast, and from Dominion’s Cove Point facility–will NOT end up going to India but instead has already been swapped or sold, at least for the first year…
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First-Ever Shipment of Marcellus LNG Leaves Cove Point, Maryland

Finally. Finally! Finally!!! The very first cargo of Marcellus Shale gas has been liquefied, loaded and as of Sunday night, set sail from Dominion’s Cove Point LNG plant–heading for we’re not sure where yet. We’ve waited YEARS for this day! Let’s pop the cork on a bottle of the bubbly and celebrate. Last week MDN told you that a ship called the Patris was due to dock at Cove Point and load the first shipment of Marcellus molecules (see Dominion Announces Cove Point LNG Open for Business). It appears that information was incorrect. It was correct at the time! Either the Patris was redirected somewhere else, or we’re not sure what happened. But news has just broken that late Sunday night, close to midnight, a ship by the name of Adam departed Cove Point loaded with the very first Marcellus shipment. Several more ships are said to be headed for Cove Point now. International shipping isn’t our specialty, so we won’t quote chapter and verse for which ships and when. This first shipment that left Sunday belongs to Japan, but there’s no indication it will actually go to Japan. As we’ve noticed and have been reporting, both Japan and India (which will take all of the LNG Cove Point can produce) are in the game of swapping cargoes they own, sending Cove Point cargoes to customers closer to the point of origin in return for receiving cargoes that originate closer to their own shores. When we hear where the first Marcellus cargo lands, we’ll let you know. In the meantime, here’s the information we can find about the very first load of Marcellus Shale gas to get exported from Cove Point…
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Dominion Announces Cove Point LNG Open for Business

Dominion Cove Point LNG is open for business–so says Dominion in a press release issued yesterday. As MDN reported late last week, the Gemmata LNG carrier had returned to Cove Point to load a second commissioning cargo of LNG (see 2nd Commissioning Cargo Now Being Loaded at Cove Point LNG). The commissioning cargo was not Marcellus/Utica gas but gas brought to the facility to be used in working out all the kinks–to be sure the facility operates as advertised. That’s now done. The LNG carrier Patris was due to dock at Cove Point Monday morning. As far as we can tell, that did happen. According to Dominion’s statement, the facility entered commercial service as of yesterday, which we take to mean the Patris is getting loaded as you read this. One article about the opening of Cove Point seems to imply the natural gas feeding it may not all come from the Marcellus/Utica. That’s bunk. We have information showing 100% of the gas will come from Marcellus/Utica drillers…
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2nd Commissioning Cargo Now Being Loaded at Cove Point LNG

Gemmata returns to Cove Point

Yesterday our favorite government agency, the U.S. Energy Information Administration, issued its weekly Natural Gas Update report. In one of the short bullet point notes we learned important new information about the Cove Point LNG export facility. We learned that the next ship to arrive and load up at the facility will NOT be the Patris, as we were led to believe (see Cove Point LNG Gets Ready to Ship First Marcellus Molecules in Apr). Instead, the first ship that loaded molecules at the facility, the Gemmata, has returned and is (as you read this) loading a “second commissioning cargo.” Which takes some explanation. The first commissioning cargo was gas brought to the facility by an LNG tanker and unloaded, regasified, and then put through liquefaction again–in order to test the facility. That first cargo was natural gas from Nigeria, brought in by Shell. And Shell shipped out the first commissioning cargo on the Gemmata on March 1 (see Cove Point Ships First LNG Cargo – But Not M-U Gas). This is the second commissioning cargo–so apparently the ship that brought in the original Nigerian gas was bigger than the Gemmata. The Gemmata unloaded its shipment of Nigerian gas in the UK, turned around and came back, docking at the facility on Tuesday of this week. Yes, the Patris is still on the way to Cove Point and will dock on April 9, next Monday, and will begin loading the first batch of Marcellus molecules…
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Atlantic Coast Pipe Wants 150 NC Workers, $25/Hr + Free Training

Atlantic Coast Pipeline, the $6.5 billion Dominion Energy/Duke Energy pipeline from West Virginia through Virginia and into North Carolina has had a few setbacks, but that isn’t stopping construction on the pipeline–in all three states where it runs. On Monday we reported on the latest setback–news that the Federal Energy Regulatory Commission is refusing to extend tree cutting season for the pipeline (see FERC Won’t Extend Atlantic Coast Pipeline Tree Cutting Deadline). According to Dominion, FERC’s decision will not delay the late 2019 start date for the project. In the meantime, there’s work to be done! One of the places where work needs to get done is North Carolina. We spotted a story from NC that says Dominion and Duke are offering to train “more than 150 people” at Nash Community College, and then put them to work building the pipeline, for $19/hour plus $45/day, which we calculate to be a total compensation package of $24.63 per hour. Details below on how to apply for the jobs and get in on the free college training…
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FERC Won’t Extend Atlantic Coast Pipeline Tree Cutting Deadline

Two weeks ago Dominion Energy asked the Federal Energy Regulatory Commission (FERC) for permission to extend tree cutting/felling season by an extra 45 days, from March 31 to May 15, in West Virginia, Virginia and North Carolina (see Atlantic Coast Pipe Asks FERC for More Time to Cut Trees). Due to restrictions for species like the threatened Indiana bat, tree cutting season is limited–from November 16 to March 31. ACP said it couldn’t meet the March 31 deadline due to a late start following state bureaucratic delays. In a presentation Dominion gave to North Carolina environmental officials a few months back, the company said if “we cannot start [pipeline construction] in time to ensure a full and efficient construction season and have to delay service by one year, the impact would be $1 billion.” Dominion maintains that worst case scenario has not yet happened. Following the FERC decision to deny extending the date for tree cutting, Dominion said they’ll shift things around and can still meet their contractual deadline of getting ACP up and running by the end of next year…
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Cove Point LNG Gets Ready to Ship First Marcellus Molecules in Apr

Patris LNG tanker

In early March Dominion Energy’s Cove Point LNG plant shipped its first-ever load of LNG (liquefied natural gas), although the gas itself was imported from Nigeria, used in testing the plant (see Cove Point Ships First LNG Cargo – But Not M-U Gas). Last week MDN told you that a BP-contracted LNG tanker, Patris, is on the way to Cove Point but will not dock until April 9th (see Cove Point LNG: BP Ship Coming for 1st M-U Pickup; India Wants Swap). The Patris will be the first ship to carry Marcellus molecules from the facility to distant shores. It now looks like we have confirmation, of a sort, that indeed the Patris will dock and load Marcellus LNG on April 9. That confirmation comes from Platts, which reports that on Monday feed gas (from the Marcellus) spiked up to 640 million cubic feet per day (MMcf/d), which is “the highest level in more than three weeks” of gas flowing into the facility. Here’s the latest on our continuing watch of Cove Point, a true game-changer for the Marcellus, and for companies like Cabot Oil & Gas that will send gas to the facility…
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Fed Court Dismisses Anti Lawsuit to Stop Atlantic Coast Pipeline

Earlier this month MDN reported that the Southern Environmental Law Center and Appalachian Mountain Advocates, on behalf of a mishmash of second tier radical groups, filed a “hail Mary” request with the federal Fourth Circuit Court of Appeals to stop construction of Dominion Energy’s Atlantic Coast Pipeline until a lawsuit sitting before the Fourth Circuit questioning the validity of the permits granted for the project is played out (see Big Green Makes Desperate Attempt to Stop Atlantic Coast Pipe). Last week the Fourth Circuit responded by denying the request to stop ACP. Why? Because the Federal Energy Regulatory Commission (FERC) has not yet decided on whether or not to rehear their decision on ACP, which Big Green previously requested. FERC has used a “tolling order” to give themselves more time to consider whether or not they were wrong in approving the ACP project. The Fourth Circuit doesn’t have jurisdiction until FERC makes a decision on rehearing. In the meantime, construction on ACP continues…
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Virginia Governor Moves to Bypass FERC in Regulating Pipe Projects

Virginia Governor Ralph Northam

Not until a few years ago when the corrupt Andrew Cuomo decided to block federally approved pipeline projects like the Constitution, and then Northern Access, did the issue of states rights verses the rights of the federal government come into sharp focus with respect to pipeline projects. At its core, it is an age-old issue. During the founding of our country the early leaders wrestled with how much control a federal government should have. We have a Bill of Rights (and a Constitution) specifically to LIMIT how much control the federal government exercises over the individual states. We support a very limited federal government. However, the founders recognized there will be times when the interests and “rights” of states clash with the federal government, and with other states. How to break a tie when deciding competing interests? Perhaps not in their wildest dreams would the founders have foreseen things like interstate highways, high tension electric lines, and yes, natural gas pipelines. Through the years our country has innovated a system based on the original founders’ vision, using agencies like the Federal Energy Regulatory Commission to oversee the permitting and permissioning of infrastructure projects like pipelines. What happens if several states want and need gas from a pipeline, but a single state stands in the way and blocks it, denying the citizens of other states the benefit of that gas? That’s why FERC was created–to referee such “wisdom of Solomon” situations. New York plunged us down the slippery slope of overturning long-established law with their lawless action in blocking FERC-permitted pipelines. Other states noticed and are now trying it themselves (like Massachusetts). The latest state to take a stab at assuming powers it doesn’t legally possess is Virginia, under a Democrat governor who plans to pass legislation that can willy nilly stop construction of federally approved pipelines like Dominion’s Atlantic Coast Pipeline…
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Cove Point LNG: BP Ship Coming for 1st M-U Pickup; India Wants Swap

“Hey Jim, what’s happening with Cove Point LNG? Didn’t you say a ship was on the way to pick up the very first cargo of Marcellus molecules?” Great question. Cove Point did see its first cargo set sail in early March (see Cove Point Ships First LNG Cargo – But Not M-U Gas). However, that first cargo was imported gas (from Nigeria) used to test the facility as part of the commissioning process. The plant chilled the Nigerian gas and loaded it onto a waiting LNG tanker and the tanker left. So yes, the plant works, but the first batch wasn’t M-U molecules, so in our book it doesn’t really count. We also told you that a second LNG tanker, called Methane Spirit, was on the way to Cove Point and would be the first ship to load and distribute M-U molecules to distant shores. Orders have changed. Methane Spirit is no longer en route to Cove Point. However, a BP-chartered ship by the name of Patris is on the way to Cove Point. Meanwhile, those who keep an eye on these things say there is currently very little feed gas (i.e. Marcellus gas) flowing into the Cove Point facility. Meaning what? Meaning it looks like the original rumor from January that Cove Point won’t be up and running, shipping Marcellus gas until April, was correct (see Uh-Oh: Cove Point LNG Exports Possibly Delayed Until April). The Patris is not due to dock at Cove Point until April 9th. Meanwhile, as India gets ready for its first contracted shipment of LNG from Cove Point, the country no longer wants it! They want to swap their Cove Point shipments with someone else. We explain it below…
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Atlantic Coast Pipe Asks FERC for More Time to Cut Trees

Dominion Energy’s $6.5 billion Atlantic Coast Pipeline (running from West Virginia through Virginia and into North Carolina) is supposed to get built this year. ACP began to cut trees along the pipeline’s path in late January (see Atlantic Coast Pipeline Begins Cutting Trees in WV & VA (Not NC)). ACP chainsaws have been busy since that time. Due to restrictions for species like the threatened Indiana bat, tree cutting season is limited–from November 16 to March 31. ACP says it won’t be done by March 31 and is asking the Federal Energy Regulatory Commission (FERC) for permission to continue clearing trees in WV, VA and NC until May 15th. Antis are making loud noises that FERC should deny the request. What will FERC do? If they don’t grant permission, ACP will be delayed–perhaps by a year…
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NC Republicans Slam Democrat Gov. for Approving Atlantic Coast Pipe

We’re not quite sure what to make of this story. North Carolina has been, as we’ve long pointed out, nitpicking in an attempt to slow down (or stop) the Atlantic Coast Pipeline (ACP) from traversing the state (see NC Plays “Death by a Thousand Questions” with Atlantic Coast Pipe). Dominion Energy and Duke Energy are building the $5-$6.5 billion, 594-mile ACP–a natural gas pipeline that will stretch from West Virginia through Virginia and into North Carolina–reaching almost to the border with South Carolina. NC has a Democrat governor, Roy Cooper, whose administration has been hassling ACP for months. But then, all of a sudden, the NC Dept. of Environmental Quality issued permits approving the pipeline–which happened at the same time Dominion and Duke set up a $58 million fund “to protect the environment” in those counties where the pipeline will run. Sure sounds like a $58 million bribe to us, but hey, what do we know? If it gets the job done, it’s a cost of doing business, right? So now NC Republicans, who would normally be in favor of a project like ACP, are crying foul and launching an investigation into NC Gov. Roy Cooper’s $58 million “slush fund,” threatening to hold up work on ACP…
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Big Green Makes Desperate Attempt to Stop Atlantic Coast Pipe

Big Green groups opposed to Dominion Energy’s $6.5 billion (up from $5 billion due to delays) Atlantic Coast Pipeline (ACP) from West Virginia through Virginia and into North Carolina are about out of options in their holy mission to stop the project. They’ve tried multiple lawsuits, protests, bullying state environmental agencies–the whole bag of nasty tricks. And yet ACP is now under construction. What’s left to try to stop it? The Southern Environmental Law Center and Appalachian Mountain Advocates, on behalf of a mishmash of second tier radical groups, have filed a “hail Mary” request with the Fourth Circuit Court of Appeals to stop construction of ACP until a lawsuit sitting before the Fourth Circuit questioning the validity of the permits granted for the project is played out. In other words, back to the tried-and-true playbook: delay, delay, delay–until eventually you deny…
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FERC Grants Cove Point LNG Permission to Begin Commercial Ops

As MDN reported last Friday, the very first cargo of LNG (liquefied natural gas) left the Cove Point LNG export facility in Lusby, Maryland (see Cove Point Ships First LNG Cargo – But Not M-U Gas). However, as we accurately surmised, that first shipment did not contain Marcellus/Utica gas molecules, but instead the gas aboard was previously shipped in from Nigeria by Shell, used in the commissioning process to test the facility. Now that the commissioning process is complete, Dominion Energy, operator of the plant, requested (on Friday) a full-blown kiss of approval from FERC to begin real, commercial operations–chilling and liquefying Marcellus gas for export. On Monday, FERC granted its big, sloppy, wet kiss of approval. Cove Point is now up and running “for real”…
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