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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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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Progress for UGI Energy’s LNG Peak Shaver in Bethlehem, PA

UGI LNG’s Temple I installation near Reading, Pa. with 3-million-gallon storage tank.

In February MDN reported that UGI is proposing a new LNG peak shaver for Bethlehem, PA. The project hit some early opposition, so UGI tweaked the design, keeping it alive (see UGI Energy Tweaks LNG Peak Shaver for Bethlehem, PA). An LNG peak shaver is a unit used for storing surplus natural gas, to have extra natgas on hand and ready during times of peak consumption during really hot summers or really cold winters. Sometimes your local gas utility will build and use a peak shaver (small LNG storage facility), so they don’t run out of natgas at a critical time, and to help with keeping prices lower by drawing down from storage if prices spike. Low prices make for happy customers. We’re interested in such facilities because of their potential as a new demand source for our plentiful gas supplies. UGI’s Bethlehem project includes building an 80-foot high LNG tank. Last week the Bethlehem Planning Board voted 3-0 to approve the tank, meaning more progress for the project…
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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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NG Advantage Virtual Pipeline Project Near Binghamton is Dead

In March MDN brought you the news that NG Advantage, which had big plans to build a virtual pipeline (gas compression & trucking facility) on the outskirts of Binghamton, NY, appears to have given up on the Town of Fenton location for the planned project (see NG Advantage Looks Beyond Fenton, NY to Build Virtual Pipeline). That impression is now further strengthened by comments coming from the Fenton town attorney at a meeting last week when he said, “My sense is that they [NG Advantage] are abandoning the project.” Abandoning in Fenton, yes. But not outright abandoning the project. Fenton, and indeed perhaps Broome County, is the biggest loser. But rumor has it that NG is looking elsewhere, nearby, for an alternative location. MDN’s sources keep whispering Hancock, NY as a possibility (in Delaware County). We’ve also heard Deposit, NY mentioned (sitting on the border of Broome and Delaware counties, not far from Hancock). MDN remains a top cheerleader to have NG bring their project to MDN’s own neighborhood, truck traffic and all, in the Town of Windsor. Sadly, no word on a Windsor option from our sources. So what did Fenton and surrounding communities achieve with their “victory” in defeating NG’s project in Fenton?…
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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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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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NG Advantage Looks Beyond Fenton, NY to Build Virtual Pipeline

In a sad postscript, it appears that NG Advantage, which had once hoped to establish a virtual pipeline operation (compressing natural gas from the Millennium Pipeline) in the Town of Fenton (suburb of Binghamton), has finally given up on building the project in Fenton and is instead looking elsewhere. At least that’s our impression based on a couple of sources. We have no confirmation nor comment from NG–so this is purely our own speculation. However, a local television station in Binghamton recently noticed that NG is loading pipes onto a trailer, moving them out of the former construction site. The Town of Fenton Zoning Board of Appeals (ZBA) ruled in February that the facility does not qualify as an allowed use under existing zoning regulations (see NG Advantage Loses Zoning Vote for Virtual Pipe Near Binghamton). The Fenton Town Board is in no mood to overrule the ZBA decision, according to Suervisor Dave Hamlin. Case closed–unless NG plans to sue the town to recover costs, or try to force the issue of building the plant–which we don’t see happening. At any rate, MDN has heard scuttlebutt around the virtual water cooler that NG is looking at several other locations–in and out of Broome County. It would be a tremendous loss for Broome if NG locates outside the Greater Binghamton area. Meanwhile, MDN continues to spot XNG trucks (from a virtual pipeline in Susquehanna County, PA) passing through the Vestal, NY area–through densely populated centers–each and every day. They are the very same kind of trucks NG had proposed to use in Fenton. Yet not a peep about the XNG trucks that pass through our community…
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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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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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Cove Point Ships First LNG Cargo – But Not M-U Gas

Earlier this week MDN told you the ship that would carry the very first cargo of LNG from Cove Point LNG had docked (see Ships Line Up for Cove Point LNG – 1st Ship Docked). LNG tanker Gemmata, as we reported, docked earlier this week at the Cove Point terminal. We assumed (incorrectly) that it would carry Marcellus/Utica gas when it left…
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