EQT Spins Off Pipeline Business, Shows Optimism on Mountain Valley Project

Researched by Industrial Info Resources (Sugar Land, Texas)--EQT Corporation (NYSE:EQT) (Pittsburgh, Pennsylvania) recently spun off a separate company, Equitrans Midstream Corporation (NYSE:ETRN), to house its midstream business as EQT focuses on upstream projects. The companies, which work in the Appalachian basin, are unfazed amid possible legal setbacks for the Mountain Valley Pipeline. Industrial Info is tracking more than $1.6 billion in active projects involving EQT and Equitrans, including nearly $500 million worth that are under construction.

Click on the image at right for a graph detailing EQT's active projects, by state.

EQT is publicly brushing off a recent legal setback that affected one of its most visible projects: the Mountain Valley Pipeline (MVP), a 303-mile natural gas pipeline system that runs from northwestern West Virginia to southern Virginia. The project was dealt a setback last month by the Fourth U.S. Court of Appeals, which vacated a Clean Water Act permit that allows the pipeline to cross rivers in West Virginia. The court later said EQT's proposal violated a special condition put forward by West Virginia that requires stream crossings to be completed within 72 hours.

Despite the ruling, EQT is sticking by its schedule and budget for Mountain Valley. "The assumption is that it comes on at the end of 2019," said Robert McNally, the chief financial officer of EQT, in a recent earnings-related conference call. He added that there have been no major changes in the company's assumptions on MVP's transmission and midstream costs: "The big change is when MVP comes online. So 2020, 2021, all of the out-years after 2019 will have MVP transportation charges, but also will have the uplift for better end markets as well."

The MVP is expected to have a capacity of up to 2 billion cubic feet per day and connect with Transcontinental Gas Pipe Line Company LLC's mainline system in Virginia. Industrial Info is tracking progress on each major segment of the MVP, as well as its compressor stations:

• $150 million line from Wetzel County to Braxton County in West Virginia, which runs 104 miles; see project report
• $250 million line from Braxton County to Pittsylvania County, Virginia, which runs 199 miles; see project report
• $120 million Bradshaw station in New Martinsville, West Virginia; see project report
• $75 million Harris station in Sutton, West Virginia; see project report
• $75 million Stallworth station in Lewisburg, West Virginia; see project report

For more information, see September 28, 2018, article - Mountain Valley Natural Gas Pipeline Project Endures Interruptions, Litigation, Storms, and October 5, 2018, article - A Tale of Two Pipelines: Atlantic Sunrise Cleared for Takeoff, Mountain Valley Hit with New Court Action.

EQT also expects to see its Hammerhead Pipeline begin service in late 2019. Hammerhead is designed to carry 1.2 billion cubic feet per day about 55 miles from southwestern Pennsylvania to Mobley, West Virginia, which is near the origination of the Mountain Valley Pipeline. Industrial Info is tracking:

• $180 million line from Allegheny County, Pennsylvania, to the state border near Morgantown, West Virginia, which runs 28 miles; see project report
• $180 million line from Morgantown to Mobley, West Virginia, which runs 23 miles; see project report
• $75 million compressor station in Pittsburgh, Pennsylvania; see project report

Hammerhead's capacity already is anchored by commitments, and EQT says it is having active discussions with other potential shippers.

MVP Southgate to Extend Mountain Valley's Reach
Under another pipeline project proposed by EQT and Equitrans, natural gas from the Mountain Valley project would be moved about 70 miles further south into North Carolina via the MVP Southgate Pipeline. This extension is anchored by a firm capacity commitment from natural gas utility PSNC Energy, a subsidiary of SCANA Corporation (NYSE:SCG) (Cayce, South Carolina). Earlier this month, the company filed with the U.S. Federal Energy Regulatory Commission (FERC) for a certificate to build and operate MVP Southgate, and it is in talks with potential shippers. It currently is targeted to begin service in fourth-quarter 2020.

Industrial Info is tracking all major aspects of MVP Southgate, including:

• $155 million line from Chatham, Virginia, to the border near Rockingham, North Carolina, which runs 44 miles; see project report
• $110 million line from Rockingham to Graham, North Carolina, which runs 28 miles; see project report
• $105 million compressor station in Chatham, Virginia; see project report
• $45 million compressor station in Graham, North Carolina; see project report

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.