Dominion's decisions show strong support, optimism for Atlantic Coast Pipeline, LNG projects

The Exponent Telegram

With work on the Atlantic Coast Pipeline virtually ground to a halt, its future — as well as the natural gas industry’s — has been cloudy at best.

And while court and regulatory obstacles remain at this time, there is reason for optimism based on recent news from Dominion Energy.

In an earnings call with investors, as well as later reports, Dominion CEO Thomas Farrell has signaled his company’s strong commitment to the ACP project, as well as the company’s increased role in liquefied natural gas (LNG).

Dominion has agreed to purchase Southern Energy’s 5 percent ownership of the ACP, meaning Dominion will own 53 percent while Duke Energy will own 47 percent.

Dominion also is in the process of purchasing Pivotal LNG, which liquefies and delivers liquid natural gas as fuel for transportation in the southeastern United States, mostly from a new production facility in Jacksonville, Florida, Dominion Chief Financial Officer James Chapman said.

“The near-term financial impact of the acquisition of these two assets is positive, though relatively small, and the increased ACP ownership is reflected in the earnings contribution estimates I provided previously. Total cash consideration for these acquisitions is around $175 million,” Chapman said.

Dominion’s and Duke Energy’s commitment to the pipeline has remained steadfast despite many obstacles along the way since the project was announced in 2013.

With more than $1 billion in added costs since then, the pipeline price tag is expected to climb above $8 billion.

But there is no doubt that there is a marketplace for the natural gas that sits under West Virginia, as well as Ohio and Pennsylvania.

The 600-mile underground Atlantic Coast Pipeline originates in West Virginia, and will travel through Virginia with a lateral extending to Chesapeake, Virginia. It then continues south into eastern North Carolina, ending in Robeson County, according to the pipeline’s webpage. Two additional, shorter laterals will connect to two Dominion Energy electric generating facilities in Brunswick and Greensville counties.

The goal is to get more dependable, clean-burning natural gas to the expanded markets in the Carolinas, supplying millions of people with the power source needed for economic development and personal use.

But the pipeline isn’t just about helping those regions and the companies involved because the pipeline project means growth and jobs for West Virginia as well.

Dominion and other companies in the natural gas industry believe the pipeline will serve as a catalyst for further growth in drilling, which means more jobs and economic growth for the Mountain State.

While there are steps to be taken to ensure West Virginia’s and Virginia’s environmental landscapes are protected, there is a clear need for the drilling of natural gas and its movement to markets in demand.

Dominion has shown both a short- and long-term commitment to West Virginia and the states in which they do business. And its most recent action is just another example.

We hope their optimism is well founded.

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