Dominion Makes Strides on LNG Export, Natural Gas-Fired Projects in Third Quarter

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Researched by Industrial Info Resources (Sugar Land, Texas)--Warm weather and lower expenses helped Dominion Resources (NYSE:D) (Richmond, Virginia), a major energy provider to in the eastern U.S., post solid gains in revenues and profits for third-quarter 2016, while the company continued to notch up progress on several major projects, including a closely watched liquefied natural gas (LNG) facility and a natural gas-fired plant. Industrial Info is tracking $28.5 billion in active projects involving Dominion.

At the end of the third quarter, Dominion had added 25,519 electric-delivery customers to its rolls, compared with the same period last year, which helped to boost revenues to $3.13 billion, a 5.42% increase from third-quarter 2015. Net income stood at $690 million, a 16.36% increase.

The company continued progress on its massive Cove Point project, which includes a $4 billion LNG liquefaction plant in Lusby, Maryland, a $100 million steam cogeneration unit in Lusby, and two natural gas compressor stations, each valued at $35 million, in Centreville and Leesburg, Virginia. The new facility is expected to liquefy 1 billion cubic feet per day of natural gas for export from the existing LNG terminal, which has a storage capacity of 14.6 billion cubic feet and a daily send-out capacity of 1.8 billion cubic feet per day. The cogeneration unit will consist of two steam turbines, each with a capacity of 65 megawatts (MW), to supplement power at the site.

Each of the natural gas compressor stations will consist of a natural gas-fired boiler to help it deliver inlet gas to the Cove Point LNG Terminal in Lusby, at a capacity of 750 million standard cubic feet per day. For more information, see Industrial Info's project reports on the LNG liquefaction plant, the cogeneration unit, the Centreville station and the Leesburg station.

But in a quarterly earnings call, Dominion executives acknowledged that progress is moving slower than expected on the Atlantic Coast Pipeline, which would ship natural gas sourced from the booming Marcellus and Utica shales from West Virginia through Virginia, to eastern North Carolina. The project already was awaiting approval from the U.S. Federal Energy Regulatory Commission (FERC), but its route now must be altered to satisfy safety concerns from the U.S. Forest Service. Dominion and its partners in the project, Duke Energy (NYSE:DUK) (Charlotte, North Carolina) and Southern Company (NYSE:SO) (Atlanta, Georgia), now expect to begin construction next autumn, and are moving the completion date from late 2018 to late 2019.

Industrial Info is tracking four of the Atlantic Coast Pipeline's largest components: the $550 million portion that runs from Harrison County to Nottoway and Dinwiddie counties in Virginia; the $475 million portion that runs from Northhampton, Halifax and Nash counties in North Carolina to Robeson County, North Carolina; the $125 million portion that runs from Northampton County, North Carolina, to Chesapeake, Virginia; and the $55 million portion that runs from Brunswick County, Virginia, to Greensville County, Virginia. For more information, see Industrial Info's project reports on the $550 million, $475 million, $125 million and $55 million portions.

"Our Cove Point Liquefaction project is now 75% complete, and the facility continues on time and on budget for a late 2017 in-service date," said Thomas F. Farrell II, the chairman, president and chief executive officer of Dominion Resources, in a quarterly earnings release. "We continue to work toward the construction of the Atlantic Coast Pipeline and the related supply header project. We expect completion of these projects in late 2019."

Dominion Resources also announced that it would sell Questar Pipeline LLC, which it acquired earlier this year, to Dominion Midstream, a master limited partnership that Dominion Resources formed to create a portfolio of natural gas assets focused on processing, storage, pipelines and terminals, for $1.73 billion. For more information, see August 24, 2016, article - Dominion, Questar to Tie the Knot in the Rockies in Merger Fueled by Pipeline, Storage, Solar Projects.

Dominion made progress on several other projects this past quarter, including the $1.2 billion Greensville County Power Station in Emporia, Virginia. For more information on the natural gas-fired plant, see Industrial Info's project report and August 4, 2016, article - Dominion Makes Headway on Power Projects, Cove Point LNG.

Also this quarter, Dominion announced it might remove a small portion of the 3.3 million tons of ash stored at the site of a former coal-fired power plant, as part of its $45 million dismantlement and demolition of the Chesapeake Energy Center in Chesapeake, Virginia. The ash that might be removed is the portion located in a pond adjacent to the Elizabeth River. The Sierra Club is suing Dominion in federal court over the latter's decision to cap in place at least most of the ash. For more information on the dismantlement, see Industrial Info's project report.

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