Dominion Energy Inc. said on Dec. 16 it was confident it will complete the proposed $7.3-$7.8 billion Atlantic Coast natural gas pipeline from West Virginia to North Carolina by early 2022, in response to a prediction by investment bank Morgan Stanley that a court decision would likely scuttle the project.
“We remain committed to completing the project for the good of our economy and the environment,” Dominion spokesman Aaron Ruby said, noting the company expected to complete construction in late 2021 with final in-service in early 2022.
Dominion made its comments after Morgan Stanley said in a report that “Atlantic Coast will likely not be completed given the Fourth Circuit’s likely (in the bank’s view) rejection, for the third time, of a newly issued Biological Opinion and Incidental Take Statement that we expect to come by the first quarter of 2020.”
In July, the U.S. Fourth Circuit Court of Appeals vacated the Fish and Wildlife Service’s (FWS) second Biological Opinion because the court found the agency’s decisions were arbitrary and would jeopardize the Rusty Patched Bumble Bee and other endangered species.
Federal agencies use Biological Opinions when authorizing projects that could adversely affect threatened or endangered species or critical habitats, and issue take statements to limit the number of those species that could be harmed.
Ruby said Dominion expects the FWS will issue a new Biological Opinion in the first half of 2020.
Appalachian Trail Issue
Dominion suspended construction of the 600-mile project in December 2018 after the Fourth Circuit stayed the FWS’ second Biological Opinion.
Dominion and its partners, Duke Energy Corp. and Southern Co., are also working through a dispute over where the pipeline can cross the Appalachian Trail.
The U.S. Supreme Court has agreed to take up the Appalachian Trail case, which is also important for the construction of EQM Midstream Partners LP’s Mountain Valley gas pipe from West Virginia to Virginia.
Analysts at Height Capital Markets said they expect the Supreme Court will issue a ruling in May or June 2020.
Analysts at Morningstar said they expect the Appalachian Trail dispute will be resolved by a favorable Supreme Court decision or an administrative or legislative solution.
Costs Could Rise
Morningstar said a route revision was the likely compromise for the endangered species dispute but noted that could boost the project’s costs to around $8 billion and push completion into 2022.
When Dominion started work on the 1.5 billion cubic feet per day pipe in the spring of 2018, the company estimated it would cost $6.0-$6.5 billion and be completed in late 2019.
Recommended Reading
Chevron-Hess Deal: To Vote or Not to Vote, That is the Question
2024-05-21 - A Hess Corp. proxy vote related to the company’s proposed $53 billion all-stock merger with Chevron Corp. has divided shareholders ahead of a May 28 deadline.
Proxy Vote Preview: Chevron, Hess and Guyana Uncertainty
2024-05-27 - Chevron Corp. stockholders will vote on May 28 and Hess’ stakeholders on May 29 on a $53 million combination that largely centers on Hess’ stake offshore Guyana.
Analysis: A Mountain of Asset Sales Loom After Oil Megamerger Era
2024-06-26 - U.S. oil and gas companies could face an uphill struggle to sell about $27 billion of assets to fund investor payouts over the next few years as the biggest wave of energy megamergers in 25 years nears the end of regulatory reviews.
Exxon Closes $60B Pioneer Deal, Reshaping Permian Basin
2024-05-03 - After facing regulatory scrutiny, Exxon Mobil closed a roughly $60 billion acquisition of Pioneer Natural Resources. The largest shale oil transaction ever signed will reshape the order of power in the vast Permian Basin oil field.
Exxon Shale Exec Details Plans for Pioneer’s Acreage, 4-mile Laterals
2024-05-03 - Exxon Mobil plans to drill longer, more capital efficient wells in the Midland Basin after a major boost from the $60 billion Pioneer Natural Resources acquisition. Data shows that Exxon is a leading operator drilling 4-mile laterals in the Permian’s Delaware Basin.