With the Northeast transforming into a supply area from a market area more quickly than anyone anticipated, U.S. supplies of gas will now outstrip demand in 2016—a year earlier than previously projected— and LNG exports from the Cove Point, Maryland, terminal will provide significant benefits against a backdrop of ample supply, Dominion vice president Don Raikes told attendees at Hart Energy’s MUM conference.

Dominion’s Cove Point LNG project is expected to be in service in the fall of 2017. In September, the company received a Department of Energy license to export LNG to non-FTA countries. Dominion has also applied for approval from the Federal Energy Regulatory Commission (FERC), which it expects to receive in the first half of this year.

In terms of U.S. gas prices, “current price projections remain relatively stable through 2030,” according to Raikes, who showed price projections in a range of $4 to $6 per thousand cubic feet (Mcf) through the next decade. By comparison, recent natural gas prices in Europe and Japan have been in a range as of $15 to $16 and $19 to $20 per Mcf, respectively. “This is the justification economically for the transaction,” he said.

Raikes also cited the greater resiliency the project may give to gas demand in the Northeast market.

“We need more demand. We have the production. Cove Point is going to be a significant outlet for gas in the Northeast,” he said. “It helps support the gas prices that we have today and help avoid boom-and bust structures.”

The Cove Point facility, currently a dedicated import facility, will be converted to exporting LNG at a projected cost, exclusive of financing, of $3.4 billion to 3.8 billion. The major costs relate to the liquefaction facilities, which are designed for 5.25 million tons per annum of LNG output. Cost savings are achieved as a result of the prior construction of a pier for LNG shippers, a pipe system and seven storage tanks that offer 14.6 Bcf of storage capacity.

Raikes ticked off a number of critical milestones being reached at Cove Point. Last April, capacity at Cove Point became fully subscribed through 20-year terminal service agreements with two customers. One is a U.S. affiliate of Sumitomo Corp. of Japan, the other an affiliate of GAIL (India). In addition, after a final investment decision was made last April, an engineering, construction and procurement contract was awarded to IHI/Kiewit Cove Point.

He emphasized Japan’s need to resolve its energy supply issues in the wake of the tsunami that led to—as of last summer—only two of its fleet of more than 50 nuclear facilities remaining in operation. In India, he cited as an example of demand growth that over 800,000 compressed natural gas-fueled vehicles were running in the city of Delhi alone. Environmentally, switching to natural gas would benefit both Japan and India, countries that rely on coal and oil for 65% and 87% of their energy needs, respectively.