Columbia LNG asks to reopen terminal

March 02, 1993|By Ross Hetrick | Ross Hetrick,Staff Writer

Columbia LNG Corp., the owner of the idle liquefied natural gas terminal at Cove Point in Calvert County, said yesterday that it has asked the Federal Energy Regulatory Commission for permission to reactivate the facility.

Columbia LNG, a subsidiary of Columbia Gas System Inc., plans to reopen the terminal, which has been dormant for nearly 13 years, in the fall of 1994 and to operate it as a storage and transportation facility for utilities and importers of liquefied natural gas.

"Columbia will not own any of the gas," said H. William Chaddock, senior vice president of Columbia Gas System Service Corp. "We are just providing a service." The new operation could provide as many as 100 jobs, depending on demand, he said.

The company plans to spend $55 million to refurbish the terminal, including new equipment to liquefy natural gas. Currently, the terminal is capable only of storing liquefied gas and then converting it back to its gaseous state.

The parent corporation, Columbia Gas System, is a major pipeline company, based in Wilmington, Del. It has been in Chapter 11 bankruptcy since July 31, 1991.

The $370 million Cove Point terminal, which can regasify up to a billion cubic feet of natural gas daily, was built in the late 1970s at the height of a natural gas shortage. Utilities were eager to get natural gas at any price, and the imported gas was sold at a premium price.

The terminal received its first shipment in March 1978. But the shipments stopped in April 1980 when the Algerian government raised its price, and domestic supplies became more plentiful as the result of price deregulation.

Under the new arrangement, the terminal would operate essentially as a public warehouse for companies that want to store or transport liquefied gas. For instance, a utility company could buy natural gas during the summer and then have it liquefied and stored at Cove Point to be used during the peak winter heating season.

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