April 1, 2021 Read More →

Virginia water review likely to further delay completion of Mountain Valley Pipeline

S&P Global Market Intelligence ($):

Virginia regulators have said they will need at least until December 2021 to complete a water quality review for Mountain Valley Pipeline LLC, further pressuring the project’s late-2021 in-service target.

The 303-mile, 2-Bcf/d project connecting Appalachian Shale gas to mid-Atlantic markets recently initiated a new round of permitting after suffering setbacks in the U.S. Court of Appeals for the 4th Circuit related to water crossing authorizations. The new approach included an individual water crossing permit application filed with the U.S. Army Corps of Engineers to enable the use of the open-cut method for some water bodies and wetlands, as well as a separate certificate amendment application at the Federal Energy Regulatory Commission.

The Virginia Department of Environmental Quality, or VDEQ, said in a March 25 letter that the 120 days allocated by the Army Corps process is not enough time for the state to complete its part of the review. VDEQ noted that it must use its individual Virginia Water Protection Permit and that it would be impossible to issue the permit by July 2.

“Based on the complexity of this project and past public controversy, we cannot reasonably issue the [Virginia Water Protection] permit before December 2021 and we believe it is quite likely that we could not issue this permit until early 2022,” it said. Instead, it sought an extension of the Army Corps’ reasonable period to one year, or March 3, 2022.

Mountain Valley is sticking with its in-service target, though some analysts were expecting that timeline to slip into 2022 even prior to the VDEQ letter. Height Securities analysts, in a research note March 30, said the VDEQ letter supports their view that the project is unlikely to enter service until the first half of 2022.

Gary Kruse of Arbo said the end of 2022 may be a more realistic time frame for completing construction, taking into account the potential for further regulatory delays, such as risks associated with Mountain Valley’s split permitting approach and uncertainties about FERC action under Chairman Richard Glick.

[Maya Weber and Eric Brooks]

More ($): Mountain Valley hits yet another snag, with Va. permit unlikely until late 2021

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