EQT Corp. and NextEra Energy Inc. unit NextEra US Gas Assets LLC on Tuesday launched a binding open season for their Mountain Valley Pipeline project after receiving more than 1.5 Bcf/d of firm capacity commitments during a nonbinding open season that ended in July.
The companies also announced a joint venture (JV) to construct and operate the 330-mile pipeline, which will leverage existing assets and an extensive pipeline network, to deliver Marcellus and Utica shale natural gas to high-demand markets in the southeast.
"As we move into a binding open season, securing 1.5 Bcf/d of firm capacity confirms we have an economically viable project," said EQT COO Randy Crawford. "Marcellus and Utica producers will have cost-effective access to the growing demand for natural gas for use by local distribution companies, manufacturers and power generation facilities."
The companies announced the project in June and launched a nonbinding open season at the time (see Shale Daily, June 12). NextEra US Gas Assets President T.J. Tuscai said the company was encouraged by the market response to Mountain Valley. For more information about the binding open season, which is scheduled to end Sept. 29, visit www.eqt.com.
The pipeline would receive regional gas production from interstate systems at various interconnections, including the existing Equitrans transmission systems in West Virginia and southwest Pennsylvania. It would also take gas from EQT Midstream Partners LP's planned Ohio Valley Connector, which will extend Equitrans from West Virginia to Clarington, OH, and connect with the Rockies Express and Texas Eastern pipelines.
Mountain Valley is still subject to FERC approval. It would also extend the Equitrans system from Wetzel County, WV, to the primary delivery point at Transcontinental Gas Pipeline Co.'s (Transco) Zone 5 compressor station in Virginia.
In June, EQT's Blue Jenkins, executive vice president for commercial, told NGI's Shale Daily that Transco Zone 5 is driven by power generators and distribution companies. With coal-fired power plant retirements on the way in the coming years, he said, the gas-fueled generation profile there will increase and provide an attractive option for producers in the oversupplied Marcellus region.
The companies also said Tuesday that EQT Midstream Partners LP, of which EQT Corp. is the general partner with a 32% limited interest, will own a majority of the Mountain Valley JV and operate the pipeline.
The southeast has increasingly become a target for producers in the Appalachian Basin, where prices have been depressed and where producers have struggled to move their natural gas. A number of other companies are considering pipeline projects to deliver Marcellus and Utica gas there (see Daily GPI, May 28; May 20).
In a commodities research note issued late last month, Morningstar estimated that brownfield expansions, flow reversals and new projects will increase Appalachian takeaway capacity by 18 Bcf/d by 2018 (see Shale Daily, Aug. 28). About 8.2 Bcf/d, the firm said, will likely head east or southeast, while more than 8 Bcf/d will head west, southwest and north.
The Mountain Valley Pipeline is expected to provide 2 Bcf/d of firm transmission capacity and be in service by late 2018.