- The Enterprise
- The Recorder
The Chesapeake Climate Action Network announced during a conference call last week that it has filed an official complaint with the U.S. Securities and Exchange Commission, saying Dominion has failed to provide adequate information about the investment risks involved in the possible export project at Dominion Cove Point.
Dominion Midstream Partners LP filed a registration statement with the SEC to offer stock under the symbol “DM,” according to a March 31 press release from Dominion.
“Dominion Midstream’s initial asset is expected to consist of a preferred equity interest in Dominion Cove Point LNG, LP,” the release states.
CCAN stated in its May 6 complaint to the SEC that the Dominion Midstream registration statement “may have omitted or inadequately disclosed material information,” citing lack of disclosure regarding permitting and litigation delay risks, environmental risks and Dominion Midstream’s ability to generate consistent cash flow as points that may have been inadequately discussed in the statement.
The Dominion Cove Point export project has already been delayed by six months, CCAN’s complaint states.
CCAN is concerned the overseas contracts Dominion has contain clauses for termination due to construction delays, which could negatively affect cash flow.
“LNG export proposals internationally are facing significantly delayed timetables and cost overruns,” said Diana Dascalu-Joffe, senior general counsel for CCAN, during the conference call Tuesday.
Karl Neddenien, Dominion Cove Point spokesman, said the project is not running behind schedule.
“We’re still consistent with our schedule,” he said.
The SEC could not disclose information on the status of Dominion’s March registration statement or if an investigation would be conducted in light of Tuesday’s complaint. All investigations are conducted privately, according to the SEC website.
“There are no questions about our ability to finance the Cove Point export project except from those who are opposed to it,” Neddenien said in an email statement Tuesday.
Neddenien cited a March 28 report from Standard & Poor’s Ratings Services that gives Dominion Resources a group credit profile rating of “A-” that states the Cove Point export project enhances Dominion’s credit quality.
Mike Tidwell, executive director of CCAN, said during Tuesday’s conference call that Wall Street investors have expressed concern to him about the investment risks involved in the Cove Point project.
“I don’t hear any concerns about the viability of the project,” said Paul Patterson, a financial analyst with Glenrock Associates who covers the power industry.
Patterson said Cove Point is already contracted, and all that is needed are the capital projects to provide the LNG export service to those customers.
“The project is fully subscribed and was before we began filing for the many permits required,” Neddenien said. “Have funding before you start a project — businesspeople know that.”