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EQT Midstream Increases Mountain Valley Pipeline's Cost

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EQT Midstream Partners, LP recently announced that the Mountain Valley Pipeline project will likely cost more than what was expected earlier. The partnership bumped overall cost estimates of the project to $4.6 billion from prior expectation of $3.5 billion due to extended work stoppages in August, as well as prolonged and heavy rainfall. Recent preparations for hurricanes also hampered the project schedule, which eventually reflected in the cost.

Work stoppages in the project were primarily caused by strong opposition from environmentalists, which resulted in increased costs. The partnership also had to incur costs related to enhancement and repairing of the devices that control erosion and sediment, owing to heavy rainfall in Virginia and West Virginia during summer.

The Pipeline is being constructed by Mountain Valley Pipeline, LLC, which is owned by EQT Midstream and partnered by NextEra Energy, Inc.’s (NEE - Free Report) subsidiary NextEra US Gas Assets, Con Edison Transmission, WGL Midstream and RGC Midstream. EQT Midstream expects to build more than 50% of the pipeline by the end of 2018. The partnership anticipates the pipeline to come online by the end of 2019.

The proposed underground 303-mile pipeline connects northwestern West Virginia to southern Virginia. The pipeline, with 42-inch diameter, will collect natural gas from Marcellus and Utica shale plays and deliver it to the Mid-Atlantic and Southeast areas of the country, where demand for clean-burning natural gas is on the rise.

Price Performance

Pittsburgh, PA-based EQT Midstream has lost 27% in the past year compared with 12.3% collective decline of its industry.

 

 

Zacks Rank & Stocks to Consider

Currently, EQT Midstream has a Zacks Rank #3 (Hold). Investors interested in the Oil and Gas sector can opt for some better-ranked stocks like Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) and RGC Resources Inc. (RGCO - Free Report) . While Petrobras sports a Zacks Rank #1 (Strong Buy), RGC Resources has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Rio de Janeiro, Brazil-based Petrobras is an integrated energy company. The company’s top line for 2018 is likely to improve 7.5% year over year. In the last four reported quarters, it delivered an average positive earnings surprise of 10.4%.

Roanoke, VA-based RGC Resources’ full-year earnings are expected to grow 5.8%. In the last reported quarter, the company delivered an earnings surprise of 40%.

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