The Cove Point LNG plant in Maryland is one of the largest liquefied natural gas (LNG) export facilities in the United States. Operated by Berkshire Hathaway Energy, it shut down operations on September 20 for a three-week annual maintenance period. The planned shutdown temporarily reduces natural gas flows to the plant to near zero, compared to a daily average of about 0.7 billion cubic feet per day (bcfd) since August.
LNG plants frequently perform these maintenance operations during periods of low global demand, either in the spring or fall, to minimize market disruptions. Cove Point is a critical infrastructure for LNG exports, with a liquefaction capacity of approximately 0.8 bcfd. This volume is enough to supply approximately five million U.S. homes each day.
Property management and distribution of shares
Berkshire Hathaway Energy owns 75% of Cove Point after completing its $3.3 billion acquisition of a 50% stake from Dominion Energy in September 2023. Brookfield Asset Management owns the remaining 25% of the facility. The acquisition strengthens Berkshire Hathaway’s position in the LNG sector by securing majority control of the plant.
The site, originally built as a natural gas import facility, has adapted to changes in the global market by becoming a key export infrastructure for the United States. The expansion of liquefied gas exports to Asian and European markets has made it a key player in international energy trade.
Temporary impact on gas flows
Since the shutdown began, natural gas flows have dropped dramatically, from an average of 0.7 bcfd to near zero. This decline is temporary and is not expected to significantly impact the global LNG market, as these maintenances are scheduled during periods when demand is historically lower. Exports will resume once the work is completed, which is expected to occur in mid-October.
Market participants are, however, closely monitoring such outages as a prolonged interruption or delays in maintenance could cause market tensions, particularly in Europe and Asia where imports of US LNG have become increasingly important in recent years.
Long-term contracts and international clientele
Cove Point exports are governed by long-term contracts. Most of the LNG produced at the site is sold under 20-year contracts to international customers. Key buyers include GAIL (India) and ST Cove Point, a joint venture between units of Japan’s Sumitomo Group and Tokyo Gas. These contracts provide stable revenues for the site’s operators, while securing a steady supply for customers in regions where natural gas plays a key role in energy production.
Cove Point continues to serve growing demand in Asia, a region with rapidly growing energy needs, particularly in Japan and India. These markets are increasingly relying on LNG imports to meet their domestic consumption, particularly in the context of decarbonization efforts and the gradual reduction of reliance on coal.
A global market under pressure
The shutdown of Cove Point comes at a time when global natural gas prices have been subject to significant fluctuations. Geopolitical tensions, including the war in Ukraine, have disrupted supply chains and prompted many European countries to turn to alternative suppliers, including the United States, to replace Russian gas. This development reinforces the strategic importance of American infrastructure such as Cove Point in securing energy supplies.
Although the plant will resume operations in a few weeks, its shutdown is a reminder that LNG exporters, such as the United States, now play a central role in the global energy balance. Cove Point’s return to full operation is eagerly awaited as Europe prepares for winter, a period traditionally marked by increased demand for natural gas.
Berkshire Hathaway Energy’s role in the Cove Point operation and LNG business is strengthening, with solid long-term growth prospects, particularly driven by growing demand in Asia and Europe.
Related News :