EQM Midstream Partners LP said on May 14 it still sees a “narrow path” to complete its long-delayed $5.4 billion Mountain Valley natural gas pipeline from West Virginia to Virginia by late 2020.
Analysts, however, said Mountain Valley and other pipelines would probably be delayed by a decision by a federal judge in Montana that the U.S. Army Corps of Engineers did not comply with the Endangered Species Act.
EQM said in its first quarter earnings that Mountain Valley “is working through the project’s remaining legal and regulatory challenges to achieve the targeted late 2020 full in-service date.”
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 by environmental and other groups to federal permits resulted in lengthy delays and higher costs for Mountain Valley and other gas pipes under construction like Dominion Energy Inc.’s $8 billion Atlantic Coast from West Virginia to North Carolina.
Then, on April 15, Chief U.S. District Judge Brian Morris ruled that the Army Corps violated federal law by issuing Nationwide Permits to cross bodies of water without adequately consulting other agencies on risks to endangered species and habitat.
Although that ruling was in a case involving TC Energy Corp.’s long-delayed Keystone XL crude pipeline from Canada to the U.S. Midwest, the judge applied the decision to the Army Corps’s handling of the Nationwide Permit program.
This week, the judge refused to limit his decision to just the Keystone case. The U.S. Justice Department then asked the U.S. Court of Appeals for the Ninth Circuit to stay the lower court’s ruling.
Analysts at Height Capital Markets in Washington said they were “skeptical” the Ninth Circuit will stay the Montana judge’s order and noted the court may not decide the case until 2021.
That would push the in-service date for Mountain Valley to at least mid-2021 and could also prevent Dominion’s Atlantic Coast from entering service in early 2022 as planned, Height Capital Markets said.
Analysts at Jefferies said “there is a silver lining for Mountain Valley as a delay in the Nationwide Permit process reduces Atlantic Coast’s likelihood due to potentially significant cost increases ... A 2023 expansion of Mountain Valley is more likely if Atlantic Coast is abandoned.”
Officials at Dominion said the company still expects “to resume construction this summer and be in-service in early 2022.”
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