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Equitrans Midstream Corporation’s ETRN Mountain Valley Pipeline (“MVP”) project in Appalachian Basin received authorization by the Federal Energy Regulatory Commission (“FERC”) to recommence construction work of another 17 miles near the Jefferson National Forest.
The proposed pipeline system is owned and operated by Mountain Valley Pipeline, LLC, a joint venture of 5 energy companies, namely Equitrans, NextEra Energy NEE, Consolidated Edison Inc. ED, RGC Resources Inc. RGCO and AltaGas Ltd, with Equitrans holding a substantial stake. The construction began in the first quarter of 2018 with estimated costs of $3.5 billion.
Earlier, FERC rejected the permits’ approval to temporarily cease the construction of the 25-mile segment of the pipeline, which moves through Giles and Craig counties, between two sections of the Jefferson National Forest. As a result, FERC formed the 25-mile exclusion zone to prevent muddy outflow on privately-owned properties from construction sites. However,the commission stated that Mountain Valley produced satisfactory evidence to demonstrate that the resumption of a 17-mile segment construction of the pipeline on private lands would not affect the forest.
The MVP pipeline system, with a diameter of up to 42 inches, is expected to have a transmission capacity of 2 billion cubic feet (Bcf) per day to markets in several regions of the United States. It stretches approximately 303 miles from Northwestern West Virginia to Southern Virginia as an interstate pipeline regulated by the FERC.
MVP often found itself in environmental groups’ crosshairs on multiple occasions aspipeline construction is alleged to constitute a violation of the environmental laws. The environmental groups, represented by the Appalachian Mountain Advocates, argued that the decision to resume construction neglects the extent of sedimentation, impacts on inhabitants and endangered species, and several other environmental effects. Project opponents added that MVP should not be allowed to continue the construction, while authorization for the water crossing and the protection of endangered species remain pending.
Importantly, in its orders, FERC claimed that the best approach to restrict environmental degradation is to complete the long-delayed project and the court’s decision does not necessarily mean it will outweigh the pipeline construction. It has extended the project’s time-limit for another two years. Notably, Equitrans’ Mountain Valley aims to complete the interstate pipeline by the end of 2021.
Company Profile & Price Performance
Headquartered in Canonsburg, PA, Equitrans is a midstream energy service provider. It delivers natural gas as well as maintains storage and gathering systems.
The company’s shares have underperformed the industry in the past three months. Its stock has declined 4% against the industry’s 13.9% growth.
Equitrans currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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