US Mountain Valley natgas pipe moving forward, capacity may be limited

RGC Resources

23/06/2023 15:07

June 23 (Reuters) - The $6.6 billion Mountain Valley
natural gas pipeline from West Virginia to Virginia is on track
to get final permits by Saturday, moving the long-delayed
project closer to re-starting construction.
    Some analysts, however, said that even when the pipe enters
service, which could be as soon as the end of 2023, it would
only operate at half capacity or less due to transmission
constraints.
    Mountain Valley has said it expects to resume construction
after the U.S. Army Corps of Engineers issues a water permit.
That should happen by Saturday as mandated by the Fiscal
Responsibility Act, which ended the debt ceiling crisis.
    Officials at Mountain Valley were not immediately available
for comment.
    Mountain Valley is one of several U.S. projects delayed
by regulatory and legal fights with environmental and local
groups. The pipe is key to unlocking more gas supplies in
Appalachia, the nation's biggest shale gas basin.
    But analysts at energy consulting firm East Daley Analytics
said Mountain Valley will only run at about 35% of its 2 billion
cubic feet per day (bcfd) capacity when it is finally built.
    That's because the Transcontinental Gas Pipe Line (Transco)
system into which Mountain Valley will connect in Virginia has
limited takeaway capacity, East Daley said.
    Transco is owned by U.S. energy company Williams Cos Inc
 WMB.N . Officials at Williams were not immediately available
for comment.
    Environmental groups, meanwhile, continue to challenge
Mountain Valley's permits in court.
    "There is no reason to think they could build and operate
this project safely, and now analysts are saying that if
(Mountain Valley) is completed, it would only run at less than
half capacity," said Caroline Hansley, senior campaign
representative at the Sierra Club, an environmental group
opposed to the pipeline.
    When Mountain Valley started construction in February 2018,
Equitrans Midstream Corp  ETRN.N , the lead partner building the
project, estimated the 303-mile (488-km) project would cost
about $3.5 billion and enter service by late 2018.
    Mountain Valley is owned by units of Equitrans, NextEra
Energy Inc  NEE.N , Consolidated Edison Inc  ED.N , AltaGas Ltd
 ALA.TO  and RGC Resources Inc  RGCO.O .

 (Reporting by Scott DiSavino; Editing by Mark Porter)
 ((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters
Messaging: scott.disavino.thomsonreuters.com@reuters.net))