Calvert County, Maryland Announces Release of Dominion Cove Point Feasibility Study

PRINCE FREDERICK, Md., -- May 04, 2004 -- The Calvert County Department of Economic Development announced today the availability of the feasibility study on the expansion of the Dominion Cove Point (Cove Point) liquefied natural gas facility. The study, prepared by RESI economic research and policy institute affiliated with Towson University, Towson, Md., outlines how the proposed expansion of Cove Point will provide major economic benefits to Southern Maryland, including creation of hundreds of new jobs, stronger economic activity and significantly more revenues for state and local governments.

The RESI study found that the project would create a total of 392 new jobs in the region – including 244 during the four-year construction phase and 148 once the expanded terminal and associated pipeline began operation. The new employment will boost the region’s annual payroll by an average of $7.9 million during the construction phase and an average of $5.1 million during the operations phase. The operations-phase jobs include 38 high-wage positions directly associated with the terminal and pipeline with average annual earnings of $70,000 – more than double the Calvert County average and almost 80 percent higher than the statewide average.

RESI also found both the construction and operations phases will be a major stimulus for increased economic activity in Southern Maryland. RESI forecast that the construction phase would produce an additional $18.3 million annually in regional economic output. The benefits would be even greater once operations began, with an additional $42.8 million in annual economic output.

Finally, the study predicted the Cove Point expansion would produce significant new tax revenues for both the state government and Southern Maryland localities. RESI forecast that the construction phase would produce an additional $1.2 million in tax revenues annually, while the operations phase would generate an additional $16.7 million per year in tax payments to state and local governments. The study said the expected tax revenue stream would far exceed the cost of the new services governments would have to provide due to the expansion project. RESI forecast a net positive fiscal impact of $91.2 million over the projected life span of the project, including its construction and operations phases.

The Cove Point expansion represents a total new investment of approximately $550 million in Southern Maryland by Dominion. The project includes increasing the storage and output capacity at the Dominion Cove Point terminal and construction of a new pipeline to make Cove Point gas supplies more available to the growing Mid-Atlantic and Northeastern markets. The pipeline will parallel an existing line through Calvert, Prince George’s and Charles counties. The expansion project is scheduled for completion in 2008.

“Expansion of the Dominion Cove Point facility will be an important economic generator for Calvert County and the entire region,” said David Hale, president, Calvert County, Maryland Board of County Commissioners. “We’re going to receive high paying jobs, increased tax revenues and a major contribution to the overall economy. This, combined with Dominion’s excellent reputation for community involvement, is a real win for the County and the Southern Maryland region.”

“We need energy supplies, particularly natural gas, for Maryland’s businesses to continue to compete regionally, nationally and internationally,” said Bob Brennan, Assistant Secretary, Rural Maryland, Maryland Department of Business & Economic Development. “Expansion at Cove Point can bring a steady supply of natural gas into our region.”

“Dominion has developed a strong and cordial relationship with Southern Maryland, and we’re delighted that the Cove Point project will bring such substantial economic benefits to the region,” said Thomas F. Farrell II, Dominion president and chief operating officer. “We look forward to our relationship with Southern Maryland growing and strengthening even more as we proceed with the Cove Point project.

“Besides the obvious economic benefits presented in this study, the Cove Point project will expand the energy supply in Maryland and the entire Mid-Atlantic,” Farrell said. “In many cases, natural gas is the fuel of choice for homes, businesses and power generation. That’s where the LNG brought into Cove Point comes in. As Federal Reserve Chairman Alan Greenspan says, LNG can play a significant role in meeting our nation’s future energy requirements.”

The RESI report also recognized Cove Point’s contribution to the energy supply in the Mid-Atlantic region, which is characterized by “robust population and industrial growth.” “Without adequate energy supply, this growth cannot be sustained,” the report said. “The proposed LNG facility expansion and associated pipeline will address this and other related needs facing the region.”

RESI was founded in 1989 and has since become the recognized authority on the Maryland economy, its industries and its markets. The institute consists of economists, policy experts, management consultants, database programmers, application developers and support staff. This report was prepared at the request of Dominion.

For more information, please contact the Calvert County, Maryland, Department of Economic Development, 410.535.4583 or 301.855.1880, via email info@ecalvert.com or Dan Donovan, Manager, Media Relations, Gas Companies, 412.690.1370. The complete report can be found on Dominion’s website, www.dom.com, keywords: Cove Point Expansion or click here to view the report as a .pdf file.

For more information on the Calvert County, Maryland Department of Economic Development, our visitor sites and attractions and the services available to assist County businesses, call 410.535.4583, 800.331.9771 or 301.855.1880; or send an e-mail to info@ecalvert.com