Mountain Valley Pipeline Completion Pushed to First-Quarter 2024, Costs Rise to $7.2 Billion
(P&GJ) — Mountain Valley Pipeline LLC has redefined its timeline for completing the Mountain Valley Pipeline (MVP) project, now aiming for a startup in the first quarter of 2024, the company announced in a regulatory filing with the Securities and Exchange Commission on Oct. 18.
The project's total cost is now estimated at approximately $7.2 billion, excluding allowance for funds used during construction, with an additional $120 million set aside for contingency.
This shift in the project's completion date is influenced by several factors, with unexpected hurdles causing more than half of the cost increase. One significant challenge has been the slower-than-anticipated ramp-up of the contractor workforce. Many crews have been hesitant to participate in the project due to past legal construction stoppages. Additionally, recruiting crews with the necessary experience has proven difficult.
Productivity and costs have also been impacted in regions with complex terrain and geology due to the application of rigorous environmental protocols. Ensuring the safety of the workforce, communities, and compliance with environmental standards remains a top priority for the MVP joint venture.
The remaining cost increase can be attributed to various factors, including financial settlements with contractors, inflation in labor and fuel costs, and heightened safety and security measures.
While the winter season may present certain challenges, construction is set to continue, with the goal of responsibly completing the remaining work. The MVP Joint Venture is committed to delivering the project's benefits to a diverse group of stakeholders as promptly as possible.
As of September 2023, the company had contributed approximately $3.0 billion to the MVP joint venture for the project. If the MVP is indeed completed in the first quarter of 2024, with a total cost of around $7.2 billion, the company's equity ownership is expected to rise from approximately 47.7% to about 48.8%. The company anticipates incurring a total of approximately $3.7 billion over the course of the project's construction, inclusive of approximately $220 million beyond the company's ownership interest.
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