Cove Point export plant to restart - sale update

Thursday, 15 October 2020
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Dominion Energy Cove Point LNG export terminal in Maryland started to exit a three-week annual maintenance closure on 12th October, according to Refinitiv data.

Dominion spent about $4 bill to add the LNG export terminal to Cove Point’s existing LNG import terminal. It handled its first export cargo in March, 2018.

US LNG export capacity is expected to rise to 10.6 bill cu ft per day in 2021 and 12.1 bill in 2022 from 10 bill cu ft today.

Cove Point is designed to liquefy about 0.75 bill cu ft per day of gas and its whole capacity for 20 years was sold to a subsidiary of GAIL (India) and to ST Cove Point, a joint venture between companies involved with Japanese trading house Sumitomo Corp and Tokyo Gas.

The company also said that it expected its transaction with Berkshire Hathaway Energy, exclusive of Questar Pipelines, to close around 1st November, 2020.

As a result, Dominion Energy will receive around $2.7 bill in cash and transfer $5.3 bill of existing Dominion Energy Gas Holdings (DEGH) related debt to the buyer at closing.

The company also said it expected to complete the sale of Questar Pipelines to Berkshire Hathaway Energy upon receipt of Hart-Scott-Rodino (HSR) clearance in early 2021 and will receive about $1.3 bill in cash and transfer around $430 mill of existing Questar Pipelines debt to the buyer.

This mutually agreed dual-phase closing is the result of updated timing expectations for receipt of the HSR clearance from the US Federal Trade Commission (FTC) related exclusively to the pipelines.

By the end of September, Dominion Energy had completed over $500 mill of open market repurchases, as well as executed a $1.5 bill accelerated share repurchase programme that will conclude in December.

When completed in early 2021, the company expected total share repurchases to be at least $3 bill.

Based on a strong year-to-date performance, Dominion Energy said it expected 2020 operating earnings per share, normalised for weather, to be in the top half of its $3.37 to $3.60 guidance range. 

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