EQM Midstream Partners LP said in a regulatory filing on Monday it was again increasing the estimated cost to build the Mountain Valley Pipeline (MVP), which is now expected to enter service in mid-2020 instead of later this year.
Management had indicated earlier this year that a 4Q2019 start-up was unlikely given the regulatory and legal issues facing the 300-mile natural gas pipeline project. But the company had declined to estimate how long the project could take until the filing with the U.S. Securities and Exchange Commission. EQM also increased the project’s cost estimate to $4.8-5 billion from the previous estimate of $4.6 billion and sharply above the initial $3.5 billion when it was launched.
EQM also said Monday that after discussions with the U.S. Department of the Interior (DOI), it has submitted a land exchange proposal that would give the federal government full ownership of private lands near the Appalachian National Scenic Trail, including property next to the Jefferson National Forest (JNF). In exchange, EQM said federal agencies would grant MVP an easement and right-of-way to cross the trail using the planned underground method that was previously approved by FERC. The agreement with DOI must be approved by respective federal agencies.
The project still needs a Nationwide Permit 12 from the U.S. Army Corps of Engineers, and authorization to work in the JNF. Management also has a close eye on a case involving the Atlantic Coast Pipeline (ACP) that could impact MVP.
It’s unclear if the land swap would address a December ruling on ACP issued by the U.S. Court of Appeals for the Fourth Circuit that found the U.S. Forest Service lacks authority to grant rights-of-way for oil and gas pipelines to cross the Appalachian Trail. MVP has also been unable to work on a segment of land in the JNF in Virginia and West Virginia since last year after the Fourth Circuit vacated federal approvals authorizing a crossing of that land.
In another project development, the North Carolina Department of Environmental Quality has denied a water quality certification (WQC) for MVP’s Southgate project, which would extend the broader pipeline into North Carolina.
State regulators said the WQC application was incomplete. The agency requested additional information from MVP earlier this year at which point the company said it was still completing route evaluations. Earlier this month, DEQ said the project could reapply for a WQC once the Federal Energy Regulatory Commission issues a draft environmental impact statement, which is expected in July, and identifies a preferred route.
MVP would move 2 Bcf/d of Appalachian natural gas from West Virginia to Virginia and connect with the Transcontinental Gas Pipe Line to tap markets in the Southeast. Southgate would move another 300 MMcf/d to North Carolina utility PSNC Energy.
MVP is a joint venture between EQM, NextEra US Gas Assets LLC, Con Edison Transmission Inc., WGL Midstream and RGC Midstream LLC. EQM is a 45.5% interest owner and would operate the system. The company is now expected to fund $2.4 billion of the project.