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Company News

EQM delays WV-VA Mountain Valley natgas pipe to early 2021

June 12 (Reuters) - EQM Midstream Partners LP delayed the expected completion of its Mountain Valley natural gas pipeline from West Virginia to Virginia to early 2021 and said it could boost the $5.4 billion project’s cost by 5% to around $5.7 billion.

Industry analysts, however, said Mountain Valley and other U.S. pipelines will likely be delayed even further by a Montana court’s decision that the U.S. Army Corps of Engineers did not comply with the Endangered Species Act.

EQM, which changed the projected in-service date in a statement issued late Thursday, had previously said it expected Mountain Valley to enter service in late 2020.

“We are confident in the ultimate completion of this important infrastructure project,” EQM Chief Operating Officer Diana Charletta said, noting it was about 92% complete.

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.

But successful legal challenges to federal permits resulted in lengthy delays and higher costs for Mountain Valley and other gas pipes, like Dominion Energy Inc’s $8 billion Atlantic Coast line from West Virginia to North Carolina.

Analysts at Height Capital Markets in Washington said on Friday that EQM’s new in-service date and potential cost increase are optimistic given legal issues with the Army Corps’ Nationwide Permit 12 program, which Mountain Valley intends to use to cross the remaining 10 miles of water bodies along its route.

In April, a Montana judge ruled the Army Corps violated federal law by issuing Nationwide Permits to cross water bodies without adequately consulting other agencies on risks to endangered species and habitat.

“Besides the (Nationwide Permit) issue, Mountain Valley faces litigation risk on several upcoming permitting decisions,” Height Capital Markets said, noting the project will likely enter service in the second quarter of 2021.

Reporting by Scott DiSavino; Editing by Dan Grebler

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