October 22, 2019 / 1:44 PM / 24 days ago

UPDATE 1-EQM delays WV-VA Mountain Valley natgas pipe, boosts costs again

(New throughout, adds details, background)

Oct 22 (Reuters) - EQM Midstream Partners LP said on Tuesady it pushed back to late 2020 the expected completion of its long-delayed Mountain Valley natural gas pipeline from West Virginia to Virginia, and boosted the estimated cost to $5.3-$5.5 billion.

Previously, the company had targeted a mid 2020 full in service date at a cost of $4.8-$5.0 billion.

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 have resulted in lengthy delays and higher costs for Mountain Valley and another gas pipeline under construction in the Mid Atlantic region: Dominion Energy Inc’s Atlantic Coast from West Virginia to North Carolina.

“While the temporary setbacks have caused schedule delays and cost overages, completion of the 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 president and chief operating officer, said in a release.

On Oct. 15, the U.S. Federal Energy Regulatory Commission (FERC) issued a project-wide order halting forward-construction progress in response to the U.S. Fourth Circuit Court of Appeals order granting a stay of a permit issued by the U.S. Fish and Wildlife Service in November 2017.

Much of Mountain Valley’s forward-construction work, however, was already deferred in accordance with its August 2019 voluntary suspension or had been largely winding down for the winter season, the company said.

The company said it expected total work on the project will be about 90% complete by the end of 2019.

The company said its three compressor stations and three certificated interconnects are 100% complete; about 80% of the pipeline work is complete, which includes 264 miles (425 kilometers) of pipe welded and in place; and approximately 50% of the right-of-way has been restored.

The 303-mile pipeline is designed to deliver 2 billion cubic feet per day of gas from the Marcellus and Utica shale in Pennsylvania, Ohio and West Virginia to consumers in the Mid Atlantic and Southeast. One billion cubic feet is enough gas to supply about 5 million U.S. homes for a day.

Mountain Valley is owned by units of EQM, NextEra Energy Inc , Consolidated Edison Inc, AltaGas Ltd and RGC Resources Inc.

Reporting by Scott DiSavino; Editing by David Gregorio

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