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EQM raises cost, delays timing of Mountain Valley natural gas pipeline, Reuters report

Published by , Editorial Assistant
World Pipelines,

Reuters has reported that EQM Midstream Partners LP has raised the estimated cost of its Mountain Valley natural gas pipeline from West Virginia to Virginia to US$4.8 – US$5 billion and delayed the projected completion to mid-2020 due to ongoing legal and regulatory challenges.

That is up from the company’s last estimate of US$4.6 billion and a target to complete the project in the fourth quarter of 2019.

EQM made the comments in a federal regulatory filing in which the company said it had submitted a land exchange proposal to the federal government in an effort to enable the pipe to cross the Appalachian Trail.

Crossing the trail became an issue after the U.S. Court of Appeals for the Fourth Circuit in December said the US Forest Service lacked authority to issue a permit for another gas pipe, Dominion Energy Inc’s US$7.0 - US$7.5 billion Atlantic Coast, to cross the Appalachian Trail on federal land. That case is on appeal to the US Supreme Court.

EQM’s land exchange proposal would grant the federal government full ownership of private lands crossed by the Appalachian Trail, including certain private land located adjacent to the Jefferson National Forest.

In exchange, the government would grant Mountain Valley a right-of-way to cross the trail using the pipeline’s previously planned underground method at an existing crossing location approved by the Federal Energy Regulatory Commission in 2017.

Analysts at Height Capital Markets in Washington said they expect environmental groups will challenge the land exchange but still expect the pipe to enter service in the second half of 2020.

When EQM started construction in February 2018, it estimated Mountain Valley would cost about $3.5 billion and be completed by the end of 2018.

The 303 mile (488 km) pipeline is designed to deliver 2 billion ft3/d of gas. One billion ft3 is enough gas to supply about 5 million US homes for a day.

Mountain Valley and Atlantic Coast are the biggest pipelines under construction to connect growing output in the Marcellus and Utica shale basins in Pennsylvania, West Virginia and Ohio with customers in the US Southeast.

Mountain Valley is owned by units of EQM, NextEra Energy Inc, Consolidated Edison Inc, AltaGas Ltd and RGC Resources Inc. EQM said it will fund about US$2.4 billion of the project and operate the pipe.

Equitrans Midstream Corp of Pittsburgh owns the general partner and a majority interest in EQM.

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