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FERC Approves Waiver on Tying, Capacity Release Arrangements Between Statoil and Gazprom at Cove Point LNG

Today FERC granted a waiver of its prohibition on tying and certain capacity release requirements sought by Statoil Natural Gas LLC and Gazprom Marketing and Trading USA, Inc. The parties sought the waiver to allow a release to Gazprom of Statoil's open access transportation capacity on the Cove Point sendout pipeline, as well as capacity on the Dominion Transmission, Inc. pipeline that is downstream of the Cove Point pipeline, to be tied or linked to a purchase and sale agreement whereby Gazprom would sell LNG to Statoil at the inlet of the Cove Point terminal, Statoil would store and regasify it and sell it back to Gazprom at the outlet of the terminal. In this case, FERC found no negative effects, including no impacts on open access competition. The Commission also noted that the waiver is an "integral component" of the Shtokman LNG liquefaction project and that granting this waiver will "facilitate the investment decisions and continued development" of the Shtokman project. FERC's order is in the eLibrary under Docket No. RP10-197.

Full post as published by LNG Law Blog on February 18, 2010 (boomark / email).