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Regulatory hurdles prompt delays in MVP, Southgate pipeline target dates


Full in-service for MVP eyed for summer 2022

Southgate target pushed to spring 2023

  • Author
  • Maya Weber
  • Editor
  • Maya Weber
  • Commodity
  • Natural Gas

Equitrans Midstream pushed back the in-service targets for the 303-mile, 2 Bcf/d Mountain Valley Pipeline and the 75-mile Southgate natural gas pipeline extension, citing regulatory delays, including requests from Virginia and West Virginia for more time to evaluate water quality applications.

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MVP and the Southgate extension combined would move Appalachian Basin gas to mid-Atlantic markets and then on to North Carolina, but have faced multiple legal and regulatory hurdles amid litigation from a coalition of environmental groups.

In a May 4 press release announcing its first-quarter 2021 earnings results, Equitrans Midstream said it "expects and supports that some additional review time will be granted" to the states by the US Army Corps of Engineers, adding it no longer expects the MVP project will have waterbody and wetland crossing approvals by the third quarter.

"MVP JV is now incorporating the winter 2021/2022 season into its project schedule and, as a result, is targeting a full in-service date during the summer of 2022 at a total project cost of approximately $6.2 billion," it said. The cost estimate is up from $5.8 billion to $6 billion listed in the company's investor presentation in February, and up from roughly $3.25 billion when the project was proposed.

Given the adjustment in the MVP schedule, the company also delayed the in-service target for MVP Southgate to the spring of 2023. That project also has regulatory hurdles, as North Carolina's Department of Environmental Quality on April 29 again denied a water quality certification for it, after adding more explanation required by a federal court.

Total Southgate costs are now estimated at $450 million to $500 million, the company said, noting the project is backed by a firm capacity commitment of 300 MMcf/d and has expansion capabilities that could provide up to 900 MMcf/d.

After setbacks in court related to a general permit for crossing water bodies and wetlands from the Army Corps, MVP in late January announced it would revamp its permitting approach for the mainline project. It sought an individual water crossing permit from the Army Corps, as well as related applications for water quality certifications from Virginia and West Virginia, and a new certificate amendment at FERC.

Environmental group Sierra Club in a statement continued to argue that it is past time for corporations behind the project to cancel it once and for all.

"The investors behind the Mountain Valley Pipeline might as well be throwing their money into a 300-mile-long money pit," Kelly Martin, director of Sierra Club's Beyond Dirty Fuels Campaign, said in a statement.