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Researched by Industrial Info Resources (Sugar Land, Texas)--It was a tough summer for the Mountain Valley Pipeline project. Construction of the underground natural gas pipeline, which is to span 303 miles from northwestern West Virginia to southern Virginia, has run a gauntlet of interruptions, delays and budget hikes due to court challenges and adverse weather. So much so that its developers have raised the estimated cost to $4.6 billion, from the original estimate of about $3.5 billion.
"Approximately half of the cost increase is due to extended periods of work stoppage during August that triggered ongoing contractual charges and schedule changes -- with the balance relating to extraordinary rainfall events that continued through the summer, recent hurricane preparedness actions that interrupted full-construction activities, and certain unanticipated construction cost overruns," according to a press release by Mountain Valley Pipeline, LLC (MVP) (Pittsburgh, Pennsylvania), a joint venture between EQT Midstream Partners LP (NYSE:EQM) (Pittsburgh) and four other energy companies.
MVP initially targeted an in-service date in the fourth quarter of 2018. The company now expects to complete more than 50% of the pipeline by yearend, with it being in full service by fourth-quarter 2019.
For more information, see Industrial Info's project reports on the Sutton, West Virginia, section and the New Martinsville, West Virginia, section.
The proposed pipeline to connect Marcellus and Utica natural gas supply to markets in the Southeast was first announced in June 2014 by EQT and NextEra US Gas Assets LLC, a subsidiary of NextEra Energy Incorporated (NYSE:NEE) (Juno Beach, Florida). Later that year, the formation of a joint venture and the securement of 2 billion cubic feet per day in firm capacity commitments at 20-year terms were announced. The pipeline developers announced economic benefit reports that projected the generation of 4,300 jobs, $396 million in construction spending and $35 million in tax revenue over a three-year period in Virginia, as well as more than $500 million in construction spending, 4,000 direct and indirect jobs and more than $40 million in tax revenues for the state of West Virginia.
MVP filed a formal application for the project with the Federal Energy Regulatory Commission (FERC) in October 2015, and in early 2016 touted a survey that showed 62% of Virginians supported the pipeline project.
In April 2018, the company announced the MPV Southgate Project, which would receive gas from the Mountain Valley Pipeline mainline in Pittsylvania, Virginia, and extend 70 miles south to new delivery points in Rockingham and Alamance counties, North Carolina. The project would be anchored by a firm capacity commitment from PSNC Energy, a subsidiary of SCANA Corporation (NYSE:SCG) (Cayce, South Carolina), with a targeted in-service date in fourth-quarter 2020. For more information, see Industrial Info's project reports on the Chatham, Virginia, section and the Graham, North Carolina, section.
But as the Mountain Valley Pipeline progressed, so did challenges by environmental groups. The Sierra Club maintains that the pipeline would damage water quality with increased sediment and chemical pollution. The Sierra Club and other opponents challenged a 3.5-mile right-of-way that was granted for the project in the Jefferson National Forest. The U.S. Fourth Circuit Court held that in issuing the right-of-way, the Forest Service did not fully explain its rational on sedimentation impacts, and that the Bureau of Land Management did not address the impracticality of alternative routes. In response, FERC issued a stop order on August 3.
On August 15, FERC modified its stop-work order to allow construction restart on about 77 miles of the pipeline route in West Virginia, with the exception of a 7-mile area. However, the order still impacted more than 200 miles of the project route, causing MVP to release as much as half of its construction workforce.
In late August, FERC allowed full construction activities to restart along the route. The Sierra Club said there were numerous other legal challenges to the pipeline still pending in court.
On September 11, MVP halted construction in Virginia due to the approach of Hurricane Florence, which threatened the area with torrential rainfall and flooding.
And on Monday, the company announced the new $4.6 billion price tag. Along with various interruptions, "significant costs have been incurred to enhance and repair erosion and sediment control devices due to unprecedented rainfall in West Virginia and Virginia during the past several months," MVP said.
The Mountain Valley Pipeline isn't the only pipeline project in the region that has been beset by legal challenges. On Monday, the U.S. Court of Appeals for the Fourth Court issued an order staying a U.S. Forest Service permit allowing construction of the Atlantic Coast natural gas pipeline on national forest lands in Virginia and West Virginia. The Sierra Club and the Southern Environmental Law Center oppose the project. The court was expected to hear arguments on the challenge on Friday.
"While we respectfully disagree with the Court's ruling, it will not have a significant impact on our construction schedule," Atlantic Coast Pipeline spokesman Aaron Ruby said in a statement on the project's website. "The Forest Service's approval impacts only 20 miles of the 600-mile route, or roughly 3% of the total project. We will continue working in all other areas of West Virginia and North Carolina, where we are making significant progress."
The $6 billion Atlantic Coast Pipeline would carry up to 1.5 billion cubic feet per day of natural gas about from the Marcellus and Utica shale plays in Pennsylvania, West Virginia and Ohio to customers in Virginia and North Carolina. The project is a joint venture project being developed by Dominion Energy Incorporated (NYSE:D) (Richmond, Virginia), Duke Energy Corporation (NYSE:DUK) (Charlotte, North Carolina), Piedmont Natural Gas Company (NYSE:PNY) (Charlotte, North Carolina) and Southern Company (NYSE:SO) (Atlanta, Georgia). It would be in service in the fourth quarter of 2019.
For more information on the Atlantic Coast Pipeline, see Industrial Info's project reports on the 83-mile segment from Harrison, Lewis and Pocahontas counties, West Virginia, to Nottoway and Dinwiddie counties, Virginia; 2.5-mile segment from Brunswick County to Greensville County, Virginia; natural gas compressor station in Buckingham, Virginia; and 186-mile segment from Northampton County to Robeson County, North Carolina.
For more information, see August 2, 2018, article - Dominion Progresses on Pipeline, Transmission Projects in Second Quarter, and August 3, 2018, article - Duke Makes Gains on Natural Gas-fired Projects, Atlantic Coast Pipeline.
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.
"Approximately half of the cost increase is due to extended periods of work stoppage during August that triggered ongoing contractual charges and schedule changes -- with the balance relating to extraordinary rainfall events that continued through the summer, recent hurricane preparedness actions that interrupted full-construction activities, and certain unanticipated construction cost overruns," according to a press release by Mountain Valley Pipeline, LLC (MVP) (Pittsburgh, Pennsylvania), a joint venture between EQT Midstream Partners LP (NYSE:EQM) (Pittsburgh) and four other energy companies.
MVP initially targeted an in-service date in the fourth quarter of 2018. The company now expects to complete more than 50% of the pipeline by yearend, with it being in full service by fourth-quarter 2019.
For more information, see Industrial Info's project reports on the Sutton, West Virginia, section and the New Martinsville, West Virginia, section.
The proposed pipeline to connect Marcellus and Utica natural gas supply to markets in the Southeast was first announced in June 2014 by EQT and NextEra US Gas Assets LLC, a subsidiary of NextEra Energy Incorporated (NYSE:NEE) (Juno Beach, Florida). Later that year, the formation of a joint venture and the securement of 2 billion cubic feet per day in firm capacity commitments at 20-year terms were announced. The pipeline developers announced economic benefit reports that projected the generation of 4,300 jobs, $396 million in construction spending and $35 million in tax revenue over a three-year period in Virginia, as well as more than $500 million in construction spending, 4,000 direct and indirect jobs and more than $40 million in tax revenues for the state of West Virginia.
MVP filed a formal application for the project with the Federal Energy Regulatory Commission (FERC) in October 2015, and in early 2016 touted a survey that showed 62% of Virginians supported the pipeline project.
In April 2018, the company announced the MPV Southgate Project, which would receive gas from the Mountain Valley Pipeline mainline in Pittsylvania, Virginia, and extend 70 miles south to new delivery points in Rockingham and Alamance counties, North Carolina. The project would be anchored by a firm capacity commitment from PSNC Energy, a subsidiary of SCANA Corporation (NYSE:SCG) (Cayce, South Carolina), with a targeted in-service date in fourth-quarter 2020. For more information, see Industrial Info's project reports on the Chatham, Virginia, section and the Graham, North Carolina, section.
But as the Mountain Valley Pipeline progressed, so did challenges by environmental groups. The Sierra Club maintains that the pipeline would damage water quality with increased sediment and chemical pollution. The Sierra Club and other opponents challenged a 3.5-mile right-of-way that was granted for the project in the Jefferson National Forest. The U.S. Fourth Circuit Court held that in issuing the right-of-way, the Forest Service did not fully explain its rational on sedimentation impacts, and that the Bureau of Land Management did not address the impracticality of alternative routes. In response, FERC issued a stop order on August 3.
On August 15, FERC modified its stop-work order to allow construction restart on about 77 miles of the pipeline route in West Virginia, with the exception of a 7-mile area. However, the order still impacted more than 200 miles of the project route, causing MVP to release as much as half of its construction workforce.
In late August, FERC allowed full construction activities to restart along the route. The Sierra Club said there were numerous other legal challenges to the pipeline still pending in court.
On September 11, MVP halted construction in Virginia due to the approach of Hurricane Florence, which threatened the area with torrential rainfall and flooding.
And on Monday, the company announced the new $4.6 billion price tag. Along with various interruptions, "significant costs have been incurred to enhance and repair erosion and sediment control devices due to unprecedented rainfall in West Virginia and Virginia during the past several months," MVP said.
The Mountain Valley Pipeline isn't the only pipeline project in the region that has been beset by legal challenges. On Monday, the U.S. Court of Appeals for the Fourth Court issued an order staying a U.S. Forest Service permit allowing construction of the Atlantic Coast natural gas pipeline on national forest lands in Virginia and West Virginia. The Sierra Club and the Southern Environmental Law Center oppose the project. The court was expected to hear arguments on the challenge on Friday.
"While we respectfully disagree with the Court's ruling, it will not have a significant impact on our construction schedule," Atlantic Coast Pipeline spokesman Aaron Ruby said in a statement on the project's website. "The Forest Service's approval impacts only 20 miles of the 600-mile route, or roughly 3% of the total project. We will continue working in all other areas of West Virginia and North Carolina, where we are making significant progress."
The $6 billion Atlantic Coast Pipeline would carry up to 1.5 billion cubic feet per day of natural gas about from the Marcellus and Utica shale plays in Pennsylvania, West Virginia and Ohio to customers in Virginia and North Carolina. The project is a joint venture project being developed by Dominion Energy Incorporated (NYSE:D) (Richmond, Virginia), Duke Energy Corporation (NYSE:DUK) (Charlotte, North Carolina), Piedmont Natural Gas Company (NYSE:PNY) (Charlotte, North Carolina) and Southern Company (NYSE:SO) (Atlanta, Georgia). It would be in service in the fourth quarter of 2019.
For more information on the Atlantic Coast Pipeline, see Industrial Info's project reports on the 83-mile segment from Harrison, Lewis and Pocahontas counties, West Virginia, to Nottoway and Dinwiddie counties, Virginia; 2.5-mile segment from Brunswick County to Greensville County, Virginia; natural gas compressor station in Buckingham, Virginia; and 186-mile segment from Northampton County to Robeson County, North Carolina.
For more information, see August 2, 2018, article - Dominion Progresses on Pipeline, Transmission Projects in Second Quarter, and August 3, 2018, article - Duke Makes Gains on Natural Gas-fired Projects, Atlantic Coast Pipeline.
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.
