Equitrans says it’s still committed to Mountain Valley Pipeline but completion date uncertain

The developer behind the Mountain Valley Pipeline told investors Tuesday that the company is still committed to completing the embattled project but is unsure when it will enter service due to repeated judicial rulings stripping it of necessary permits. 

While recent decisions by the U.S. 4th Circuit Court of Appeals “are in our view wrong and represent a significant departure from traditional judicial deference,” they “elevate the uncertainty around our ability to bring MVP to completion,” said Equitrans Midstream CEO Tom Karam on a year-end earnings call Tuesday. 

“Obviously we are no longer targeting a summer 2022 in-service” date, said Karam. 

Asked by an investor whether 2023 is “still on the table right now” as a possible date for the pipeline entering operation, Karam said that “I can’t give you any timing.”

Fourth quarter results released by the company ahead of Tuesday’s call also noted that “due to the evolving regulatory and legal environment for pipeline construction and ongoing challenges,” project backers are “evaluating the MVP Southgate project … including potential changes to the project design and timing.” 

The 303-mile Mountain Valley Pipeline would stretch from West Virginia to Pittsylvania County, Virginia, where the Southgate Extension would then connect to carry gas into North Carolina. 

In December, Virginia’s State Air Pollution Control Board denied MVP a key air permit for a compressor station planned to support the Southgate extension. North Carolina has also twice denied the pipeline a necessary water permit. 

Earlier this month, the 4th Circuit overturned a critical approval for the main pipeline from the U.S. Fish and Wildlife Service on the grounds that the agency hadn’t adequately evaluated the pipeline’s impact on several endangered species. The ruling was the second time the court had questioned the project’s Fish and Wildlife permit, and it followed a January decision yanking MVP’s Forest Service and Bureau of Land Management approvals. 

In the wake of the rulings, uncertainty over Mountain Valley Pipeline’s future has grown among investors. 

Last week, NextEra Energy revealed in filings with the Securities Exchange Commission that it was writing down $800 million of its investment in the project and that it had “determined that the continued legal and regulatory challenges have resulted in a very low probability of pipeline completion.”  

Financial analysts on Tuesday’s call also showed doubts about whether the project will be completed, asking questions about scenarios “if MVP doesn’t survive” or “where we’re not able to go forward on MVP.” 

Karam was emphatic that Equitrans Midstream is working “to find the right path forward that will get us success on MVP.” 

“The need for projects like MVP could not be more clear,” he said. “Additional natural gas supply in the form of Appalachian natural gas is essential to support the retirement of coal-fired power plants in the southeast United States and to ensure reliability of supply to the very areas needing to ensure such reliability for the long term.”