Sept. 11 (Bloomberg) — Dominion Resources Inc. won U.S. Energy Department approval to export liquefied natural gas from an existing import terminal in Maryland, the fourth such project authorized by the agency amid a natural-gas glut.
The project to modify the terminal, which may cost as much as $3.8 billion, was approved pending environmental reviews, according to a statement today. Richmond, Virginia-based Dominion rose almost 1 percent, to $58.60 st 2:45 p.m., in trading on the New York Stock Exchange after the announcement.
Dominion still requires approval from the Federal Energy Regulatory Commission to start construction at the facility at Cove Point, on the shores of the Chesapeake Bay, Dan Donovan, a spokesman for the company, said today in an interview.
“We have financing and we’re fully subscribed by customers for capacity,” Donovan said. Final regulatory approval could come in the first quarter next year, he said.
Advances in natural-gas drilling techniques, including hydraulic fracturing, have led to increased U.S. production, prompting companies to seek export authority to markets including Japan and India. The Energy Department must approve before natural gas can be exported to nations that lack a free- trade agreement with the U.S.
“The development of U.S. natural gas resources is having a transformative impact on the U.S. energy landscape, helping to improve our energy security while spurring economic development and job creation,” the agency said in a statement.
Shipments for Cove Point are under contract for 20 years with affiliates of Tokyo-based Sumitomo Corp. and GAIL India Ltd., based in New Delhi, Dominion announced April 1. It hired IHI E&C International Corp of Houston and Kiewit Corp. of Omaha, Nebraska, to build the complex.
The agency on Aug. 7 granted Lake Charles Exports LLC the authority to ship natural gas from its terminal in Louisiana. The company is a jointly owned subsidiary of BG Group Plc based in London and Southern Union Co., which was acquired in 2012 by Dallas-based Energy Transfer Equity LP for $5.4 billion.
The U.S. has previously approved liquefied natural gas exports from Cheniere Energy Inc.’s Sabine Pass LNG terminal in Cameron Parish, Louisiana, and the Freeport LNG Terminal in Quintana Island, Texas. About 18 applications are pending at the department.