4th Circuit stay to delay remaining mainline work to 2020
Project to be 90% complete by end of 2019
The developer of Mountain Valley Pipeline on Tuesday delayed the in-service target for the 303-mile, 2 Bcf/d natural gas pipeline project to late 2020 and bumped up its estimated cost to $5.3 billion to $5.5 billion following a court stay involving Endangered Species Act protections.
The developer – led by EQM Midstream Partners alongside NextEra US Gas Assets, Con Edison Transmission, WGL Midstream and RGC Midstream – said project work should be about 90% complete by the end of 2019. The pipeline will run from northwestern West Virginia to southern Virginia.
Currently, MVP’s three compressor stations and certified interconnects are complete, along with 80% of the pipeline route, it said, adding that the remaining mainline work will now be pushed back to 2020.
The extended timeline – the prior target was a startup in mid-2020 – and cost increase announced Tuesday reflect a re-sequencing of the previously planned construction schedule, MVP said.
Faced with litigation from environmental groups challenging its ESA authorizations from the US Fish and Wildlife Service, MVP had previously voluntarily suspended some work. The October 11 stay of those authorizations issued by the US Court of Appeals for the 4th Circuit was followed by a stop-work order from the Federal Energy Regulatory Commission with exceptions for work needed for stabilization and restoration.
The project’s prior voluntary suspension of forward construction and inability to work in streams and wetlands prevented MVP from fully completing portions of the route, it said.
“This resequencing of work has created carrying costs and caused the use of additional time and crews needed to safely maintain the entire 303-mile route over the winter,” it added.
IMPACT
The greenfield MVP project was originally scheduled to enter service in November 2018 at a cost of $3.3 billion, but has since faced an onslaught of regulatory delays that have held up the pipeline’s construction.
With MVP likely to drive an increase in West Virginia’s Utica gas production, the pipeline is not expected to ease in-basin congestion or provide much support for gas prices at supply hubs like Dominion South, according to S&P Global Platts Analytics.
The project’s cost increase, which could ultimately translate into higher transportation costs on the pipeline, would likely have the biggest impact on power generators in the Mid-Atlantic.
Still, with interconnections to both Columbia Gas Transmission and Transcontinental Gas Pipe Line, the project is expected to put pressure on Transco Zone 5 gas prices.
