The North Carolina Department of Environmental Quality (DEQ) again denied Mountain Valley Pipeline’s (MVP) request for a water permit for its proposed Southgate natural gas pipeline project from Virginia to North Carolina.

The DEQ first denied the request in August 2020. MVP appealed that decision to the U.S. Court of Appeals for the Fourth Circuit, which remanded the case back to the DEQ to “explain why the Department chose denial over conditional certification.”

DEQ said in its second denial on April 29 that conditional approval “does not provide the reasonable assurance of compliance with water quality requirements.”

“A conditional approval, as the state’s hearing officer recommended, would have satisfied the (DEQ’s) concerns ... while meeting North Carolinians’ demand for natural gas,” MVP Southgate said in response.

On its website, MVP says construction of the 75-mile, 0.4-billion cubic feet per day (Bcf/d) Southgate extension was targeted to start in 2021 for completion in 2022.

Part of Southgate’s problem is that the $5.8-$6.0 billion MVP mainline from West Virginia to Virginia is still under construction and there is no guarantee it will enter service after Dominion Energy Inc. canceled its $8 billion Atlantic Coast gas pipe from West Virginia to Virginia and North Carolina in 2020.

MVP has said it expects to complete the 303-mile, 2.0- Bcf/d mainline by the end of 2021. Many analysts, however, expect it will be delayed until 2022.

MVP and Atlantic Coast are just two of several U.S. pipelines delayed by regulatory and legal fights with environmental and local groups that found problems with federal permits issued by the Trump administration.

When MVP started construction in February 2018, it estimated the project would cost about $3.5 billion and enter service by late 2018.

MVP is owned by units of Equitrans Midstream, NextEra Energy, Consolidated Edison, AltaGas and RGC Resources.