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Mountain Valley Pipeline again pushes back in-service date, raises project costs

Following regulatory challenges affecting its planned construction schedule, Mountain Valley Pipeline LLC delayed its 2-Bcf/d natural gas pipeline project's in-service date to late 2020 and raised the cost estimate to $5.3 billion to $5.5 billion.

The Federal Energy Regulatory Commission on Oct. 15 ordered Mountain Valley to halt all project construction outside of restoration and stabilization activities. Mountain Valley had already voluntarily suspended forward-construction work in certain areas when environmental groups sued the U.S. Fish and Wildlife Service over project authorizations.

The work suspension and inability to work in streams and wetlands hindered the company from finishing parts of the route, shifting more mainline work into 2020, the company said in an Oct. 22 news release. The schedule change has generated carrying costs and prompted the need for additional time and crews to maintain the pipeline's 303-mile route during the winter.

"While the temporary setbacks have caused schedule delays and cost overages, completion of the [Mountain Valley] project is critical to serving the growing demand for domestic natural gas in the mid-Atlantic and Southeast regions of the United States," Diana Charletta, EQM Midstream Partners LP president and COO, said in the release.

The EQM Midstream-led project estimates that approximately 90% of the project work would be completed by the end of the year. So far, Mountain Valley has completed three compressor stations and three certificated interconnects. It has finished about 80% of the pipeline work, including 264 miles of pipe. Mountain Valley has also fully restored about 50% of the right-of-way.

Mountain Valley previously raised its project costs to $4.8 billion to $5.0 billion, with an estimated in-service date of mid-2020. The move was due to a proposed land exchange when the U.S. Court of Appeals for the 4th Circuit vacated its permits to cross through national forest land.

Mountain Valley Pipeline is a proposed pipeline system that spans from northwestern West Virginia to southern Virginia to deliver Appalachian gas to East Coast markets and pipeline connections. It is a joint venture of EQM Midstream, NextEra Energy Inc., Consolidated Edison Inc., AltaGas Ltd. and RGC Resources Inc.