Equitrans Midstream Assures Investors on New Timeline for MVP
A lack of workers last summer pushed back the completion date of the controversial Mountain Valley Pipeline to first-quarter 2024, but Equitrans Midstream executives assured investors Tuesday that the company meet its new timeline.
“We are confident in the plan and schedule, and optimistic that MVP can still provide consumers some much needed financial relief this winter,” said Tom Karam, Equitrans’ chairman and CEO, at the company’s third-quarter earnings conference.
The 303-mile MVP will take natural gas from West Virginia to southern Virginia with an expected capacity of 2 Bcf/d. The pipeline would connect the Marcellus and Utica shales to southern U.S. markets. Equitrans will operate the pipeline, which is a joint venture with NextEra Capital Holdings, Con Edison Transmission, WGL Midstream MVP and RGC Midstream.
The project has been long delayed by legal actions from residents and environmental groups opposed to the project. In June, President Joe Biden signed legislation declaring the pipeline in the national interest as part of the debt-ceiling compromise deal with Congress. The law directed federal agencies to issue all authorizations for the project.
The U.S. Supreme Court shot down a last legal challenge on July 27, after work on the pipeline had been on and off for months. Legal challenges and protests have continued, including an incident on Oct. 16 in which three protesters were arrested after chaining themselves to equipment on site.
Originally slated for completion by the end of 2023, executives moved the finish line to first-quarter 2024 and raised the project’s price tag to $7.2 billion from $6.6 billion.
“The revision was driven by multiple factors, including the unexpected difficulty in ramping up construction crews, particularly as a result of the history of court-related construction stops, including the nearly three-week court stay in July,” Karam said.
The difficulty with finding workers extended to finding personnel with the experience to handle the company’s commitment to an “unprecedented level” of environmental and safety protocols that govern the MVP’s construction, Karam said.
In mid-October, the pipeline’s workforce received full strength, with 4,500 personnel working on the pipeline’s right-of-way. Equitrans plans to drop the number of workers to 1,500 by the end of the year as the project nears completion.
“We should be able to hit 1Q 2024,” said Diana Charletta, Equitrans’ president and COO. “We are making steady progress right now. Last week we passed over the halfway point for a number of water crossings. The weather has been cooperative.
“So, our current schedule was developed considering the full complement of crews based on their productivity over the last 60 days or so and certainly considering the heightened environmental protocols that we have been talking about.”
Karam said that over the next two months, work crews will complete the major boring activities and most water crossings left in MVP’s path.
Activity in January will largely focus on commissioning, and the number of workers will fall below 600 people, Charletta added. At that point, weather extremes will no longer be as much of a factor to delay completion.
“If we have some weather issues and we have less and less people on location, then there is less risk of that same type of cost increase,” she said.
Financially, the company reported a third-quarter net income of $127 million, versus a $506 million loss during the same period last year. Operating revenue for the year was $339 million, $6.1 million higher than the same period last year.
Karam noted that the third-quarter earnings meeting would be his last as Equitrans’ CEO. Charletta will be taking over for Karam as CEO on Jan. 1.
