The Mountain Valley Pipeline’s (MVP) planned in-service date has slipped to 2022, and the total cost for the prolonged construction of the project has swelled to around $6.2 billion, management for sponsor Equitrans Midstream Corp. (ETRN) said Tuesday.
Discussing the midstreamer’s 1Q2021 financial results in a conference call with analysts, COO Diana Charletta said the Virginia Department of Environmental Quality and West Virginia Department of Environmental Protection have asked for more time to review MVP’s water quality permit applications.
“We do not believe that we will receive the necessary approvals during the third quarter of 2021, which we previously expected,” Charletta said. “The shift in permit timing now introduces another winter season to navigate, which led to our updated in-service target and cost.”
As for the MVP Southgate project, a planned extension of the MVP mainline into North Carolina, the COO added that “given the shift in MVP timing and expectations for the timing of Southgate permit approvals, we now are targeting Southgate construction in 2022 and in-service during spring 2023.”
ETRN had previously hoped to bring the original 303-mile, 2 million Dth/d MVP mainline into service this year. When construction on the system started in 2018, the pipeline was estimated to cost $3.5 billion and be in service by the end of 2018. ETRN holds a 47.8% ownership stake in MVP and now expects to fund about $3.1 billion of the project costs.
Earlier this year, MVP developers notified the Federal Energy Regulatory Commission of plans to pursue new permitting to clear the way for hundreds of proposed waterbody crossings along the pipeline’s route, which begins in West Virginia and crosses into southwestern Virginia.
The latest delay for the MVP mainline comes as the North Carolina Department of Environmental Quality (NCDEQ) has again denied water quality permitting for the Southgate expansion.
The latest denial, reissued to address flaws identified in a ruling by the U.S. Court of Appeals for the Fourth Circuit, referenced the uncertainty surrounding the mainline project — which has endured multiple delays and regulatory setbacks — as a key reason behind the NCDEQ’s decision not to approve the MVP expansion.
In a denial letter issued last week, the NCDEQ wrote that it “reaffirms that it is not appropriate” to issue the permits “until it is presented with sufficient information to ensure that authorizing construction of the Southgate Project will not result in unnecessary and avoidable impacts to surface waters and riparian buffers.”
© 2022 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 | ISSN © 1532-1266 |