Federal Energy Regulatory Commission Chairman Joseph Kelliher said Thursday he will deal with an application to review Dominion Resources Inc.'s (D) Cove Point, Md., LNG expansion project "with all deliberate speed," recognizing it as a priority matter.

A federal appeals court earlier this month rejected the federal regulator's approval of the Dominion Cove Point LNG project, so that FERC could "more fully address whether the expansion can go forward without causing unsafe leakage."

The FERC will convene a technical meeting Aug. 6 for the companies involved in a court rejection of the Cove Point liquefied natural gas expansion project's approval, after Dominion asked the regulator for an expedited review for the end of August.

Depending on how fast FERC reacts, the decision could potentially delay the project. Dominion says it still believes it can have the expansion project online by the end of the year.

"We'll act in due course...with all deliberate speed," Kelliher told Dow Jones Newswires on the sidelines of a Senate hearing.

Natural-gas distributor Washington Gas Light Co., or WGL, had objected to the expansion, saying the influx of LNG would cause its distribution system in the mid-Atlantic region to suffer severe leakage.

FERC said in a regulatory filing that the technical meeting next week with Dominion and WGL "would assist staff in evaluating these matters."

The meeting will be held Aug. 6 "in order that the parties and the commission staff can discuss whether and when the Cove Point Expansion Project can go forward without causing unsafe leakage consistent with the public interest."

"It's a largely an engineering-type of question that's pending in front of us," Kelliher said, adding that there were "a couple of different ways we could reach a conclusion."

"Is there a way the expansion wouldn't increase the flow through the Washing Gas Light system?," the chairman said, adding, "We need to develop a better record in the eyes of the court."

Cove Point is in the midst of a significant expansion, started after FERC approved the project in August 2006. The project is designed to take the facility's peak capacity from its current 1 billion cubic feet a day to 1.8 billion cubic feet a day, and storage capacity will increase from 7.8 billion cubic feet to 14.6 billion cubic feet.

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