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Equitrans' (ETRN) MVP to Reset Permit Procedure for Completion

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Equitrans Midstream Corporation’s ETRN Mountain Valley Pipeline (“MVP”) project in the Appalachian Basin often found itself in several legal tangles as the pipeline construction is alleged to violate environmental laws.

However, in order to prevent any more run-ins with the law, MVP planned to reset the permitting procedure that hampers the completion of the natural gas pipeline.

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 - Free Report) , 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.

MVP stretches approximately 303 miles from Northwestern West Virginia to Southern Virginia as an interstate pipeline regulated by the Federal Energy Regulatory Commission (“FERC”). It has a diameter of up to 42 inches and is expected to have a transmission capacity of 2 billion cubic feet (Bcf) per day to markets in several regions of the United States.

Equitrans stated that MVP will acquire individual crossing permits from the Army Corps of Engineers of the United States. Notably, the individual permits rendered critical as project opponents issued the Nationwide Permit program, which covered all streams and wetlands crossings under one authorization. Most analysts opine that these individual permits could delay the initiation of the pipeline from late 2021 to 2022 as it is a more expensive and lengthy process.

MVP often found itself in the crosshairs of states and environmental groups on multiple occasions asthe pipeline construction breached several environmental laws. The environmental groups, represented by the Appalachian Mountain Advocates, argued that the pipeline system poses threat to inhabitants and endangered species from contaminated waterways linked to the pipeline system and, therefore, was suspended several times.

Most recently, the Virginia Department of Environmental Quality needed pipelines with a larger diameter to seek individual stream-crossing permits rather than using the Nationwide Permit program. Despite the latest setback, MVP assured to complete the pipeline installation on schedule with estimated costs of $5.8-$6 billion.

Equitrans hopes that the shift to individual permits will induce an efficient and effective path to project completion. Importantly, these permits will involve a more accurate, stream-by-stream analysis and several environmental groups claimed that this new permit procedure could further delay the largest natural gas pipeline construction in Virginia.

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 gained 0.3% compared with the industry’s 22.6% growth.

 

 

Zacks Rank

Equitrans currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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