Warren Buffett Takes Majority Ownership Of LNG Project

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Warren Buffett Takes Majority Ownership Of LNG Project

Berkshire Hathaway, Warren Buffett’s investment vehicle, has bought Dominion Energy’s share in the Cove Point LNG project in Maryland.

The stake, which cost Berkshire $3.3 billion, has brought the company’s stake in Cove Point to 75%, with the rest held by Brookfield Infrastructure Partners, Bloomberg reported.

Cove Point LNG has an annual capacity of over 5 million tons of liquefied natural gas, most of which has been contracted on a long-term basis with buyers including Tokyo Gas Co. and Sumitomo Corp.

The acquisition comes at a time when U.S. LNG is one of the hottest growth areas in global energy. Following Europe’s gas squeeze last year, when Russia turned most taps off in response to EU sanctions, U.S. LNG became the primary source of gas for the continent.

This year, supply in Europe is not that tight, at least for now, but it might yet tighten as winter approaches. In that, Europe will again be competing with Asian LNG importers.

Currently, there are only seven LNG exporting projects in the United States but projections are for a massive increase in capacity that would turn the U.S. into the world’s largest exporter of the superchilled fuel.

Eight new LNG projects are under construction right now. When completed, they would ad a combined 86 million tons in annual production capacity, Reuters reported earlier this week.

This capacity expansion, however, also involves concern about a potential shortage of skilled workforce.

“Labor has grown as an inflationary concern for everyone in the industry. We need to actively forecast and manage labor availability and supply chain like never before,” Bechtel Corp’s head of the global energy business, Paul Marsden, told Reuters.

Bechtel Corp. is responsible for the construction of almost a third of large LNG production projects over the past two decades, Reuters has noted.

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