The lead developer of the $6.6bn Mountain Valley natural gas pipeline is standing by a target to start service in the second half of 2023, even as a new bill backed by US senator Joe Manchin (D-West Virginia) raises the prospect of fast-tracked permitting.
US midstream company Equitrans Midstream executives today stood by their existing timeline for finishing the 300-mile West Virginia-Virginia pipeline, which has faced repeated delays from permitting issues and lawsuits. They said they were unable to predict exactly how the potential passage of Manchin's bill might affect project timelines they last revised in May.
"It's too early to tell, and it all depends on the timing of the legislation," Equitrans Midstream chief executive Thomas Karam said on an earnings call. "But suffice it to say that we're clearly pleased with this proposed legislation."
Manchin released new details on the energy permitting bill on 1 August, including a requirement for federal agencies to finish permitting of the Mountain Valley Pipeline. Top Democrats committed to advance that bill — legislative text of which has not been released — during negotiations with Manchin to vote for a separate budget package expected to spend $369bn on climate change and energy security.
Manchin believes the permitting bill might allow the 2 Bcf/d (57mn m³/d) Mountain Valley Pipeline, which would originate in West Virginia and boost takeaway capacity from the Marcellus shale, to begin service earlier than the second half of 2023. The pipeline could come on line within six months, Manchin said, helping bring down natural gas prices that are adding to inflation.
"It's going to help all of us get through the winters and help us basically with LNG exports," Manchin said.
Henry Hub natural gas futures over the 2022-23 winter heating season settled at a price of $7.49/mmBtu on 1 August. That is substantially more than the $5.36/mmBtu spot prices last winter, driven in part by increased gas demand from US LNG export facilities that are running near maximum capacity. Pipeline supporters say finishing the project would boost supply and put downward pressure on prices.
Even if Manchin's permitting bill does not revise the targeted in-service date for the Mountain Valley Pipeline, company executives believe its enactment could support its proposals to expand the project and develop the 75-mile extension of the pipeline into North Carolina, called Southgate.
"This proposed legislation will benefit the MVP expansion and the MVP Southgate project, as well as other energy infrastructure projects by providing a timely and certain permitting process," Karam said.
Equitrans Midstream's shares today jumped by 10pc, as investors reassessed earlier expectations about the uncertainty of finishing the project. US utility NextEra Energy earlier this year had written off its $770mn investment in the project because of its "very low probability of completion."
Environmentalists say they will fight to block the permitting bill, which Democrats have pledged to consider this autumn. The "backroom deal" would threaten communities and ignore input from states and tribes, Center for Biological Diversity energy justice program director Jean Su said.
