Equitrans Delays Mountain Valley Natural Gas Pipeline Again, Increases Projected Cost
(Reuters) — U.S. energy firm Equitrans Midstream has delayed the estimated completion of its Mountain Valley natural gas pipeline from West Virginia to Virginia to the second quarter from the first quarter due in part to adverse weather in January.
The company also boosted the projected cost to complete the project to around $7.57 billion-$7.63 billion, up from a prior estimate of about $7.2 billion.
Equitrans spoke about Mountain Valley in its fourth earnings report, which beat estimates.
Mountain Valley is the only big gas pipeline under construction in the U.S. Northeast. It has encountered numerous regulatory and court fights that have stopped work several times since construction began in 2018.
The pipe, which is key to unlocking gas supplies from Appalachia, the nation's biggest shale gas-producing region, needed a bill from the U.S. Congress that was signed into law by the president and help from the Supreme Court before it could restart construction.
In its earnings release, Equitrans CEO Diana Charletta said "construction crews encountered adverse weather conditions, including precipitation well above 20-year averages."
"These conditions were far worse and longer in duration than anticipated, imposing a significant impact on productivity, which, in turn, impeded our ability to reduce construction headcount," Charletta said.
Delays and cost overruns are nothing new for Mountain Valley.
When Mountain Valley started construction in February 2018, Equitrans estimated the 2.0 billion cubic feet per day project would cost about $3.5 billion and enter service by late 2018.
The 303-mile (488-kilometer) Mountain Valley project is owned by units of Equitrans, the lead partner building the pipe with a roughly 49% interest, NextEra Energy NEE.N, Consolidated Edison, AltaGas and RGC Resources. Equitrans will operate the pipeline.
Separately, Equitrans Executive Chairman Thomas Karam said in the earnings release that the "Board of Directors has been engaged in a process with third parties that have expressed interest in strategic transactions with our company."
He said the board has engaged outside advisors and the process is ongoing, noting "There is no guarantee that any transaction will result from this process."
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