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Author: cnfrost Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 175  
Subject: D acquires Cove Point LNG Date: 8/1/2002 11:02 AM
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Dominion Adds Gas Pipeline Links, Storage Capacity With Acquisition of Mid-Atlantic LNG Facility


RICHMOND, Va., Aug 1, 2002 (BUSINESS WIRE) -- Dominion (D) has agreed to pay $217 million to acquire Cove Point LNG Limited Partnership, owner of the nation's largest liquified natural gas import facility, which federal regulators have approved for reactivation next spring.

The facility on the Chesapeake Bay near Baltimore will provide 5 billion cubic feet of storage capacity and daily send-out capacity of 1 billion cubic feet. The terminal is linked by its own pipeline to the major Mid-Atlantic gas transmission systems of Transcontinental Gas Pipeline, Columbia Gas Transmission and Dominion Transmission.

The facility is already 100 percent subscribed with agreed rates approved by the Federal Energy Regulatory Commission. An additional 2.5 billion cubic feet of storage capacity is planned and expected to be in service by 2004, which is also subscribed.

Cove Point will receive and store natural gas shipped to the U.S. in liquified form, where it is off-loaded, stored for subsequent gasification and then delivered.

Dominion expects to complete the purchase from The Williams Co. (WMB) in September following review by federal regulators under the Hart-Scott-Rodino Act. FERC approved full reactivation and expansion of the dormant facility last autumn. Additionally, between $18 million and $28 million in site development costs expected to be incurred between now and closing will be paid by Dominion.

Thos. E. Capps, chairman, president and chief executive officer, said:

"Cove Point Terminal is a timely, well-located addition to our $35 billion base of assets that will be accretive to earnings when it enters service.

"It will grow in value by linking natural gas supplies from non-U.S. sources with high-growth natural gas markets in the Mid-Atlantic. It is also positioned to serve existing Dominion Energy gas-fired generation facilities, including Possum Point, Remington and Ladysmith, as well as Dominion's Fairless Works project now under development in Pennsylvania.

"As stewards of one of America's largest and safest nuclear programs, we'll bring to Cove Point our high safety standards and our demonstrated success in operational security. We look forward to working with the U.S. Coast Guard and other federal and state agencies to ensure its long-term safe and secure operations."

Dominion will ultimately finance the acquisition with a combination of debt and additional share issue. The facility, which now employs 25 people, will employ 65 people when it enters operations. It originally entered service in the early 1970s. It was taken largely out of service more than 20 years ago and purchased by Williams from Columbia in 2000. When Dominion acquires the facility, it will be operated by Dominion Energy.
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