It took an “Act of Congress” and a decision from the highest court in the land — handed down by the Chief Justice no less — but it’s looking more and more like Mountain Valley Pipeline (MVP) will be completed as early as by the end of this year, opening up 2 Bcf/d of new takeaway capacity for the increasingly pipeline-constrained Appalachian gas supply basin. That’s shifted the industry’s gaze to bottlenecks downstream of where the bulk of the volumes flowing on the new pipeline will land — on the doorstep of Williams’s Transco Pipeline in southern Virginia. A number of midstream expansions have been announced to capture the influx of natural gas supply from MVP and shuttle it to downstream markets in the Mid-Atlantic and Southeast regions, and indications are that more will be announced and greenlighted in the coming months. These projects will be key to both enabling gas production growth in the Appalachia basin as well as meeting growing gas demand in the premium markets lying on the other side of the constraints. In today’s RBN blog, we delve into the details and timing of the announced expansion projects vying to increase market access to MVP supply.
In Part 1, we provided the latest developments on MVP, which, along with the growing demand for gas-fired generation in the Mid-Atlantic and Southeast, is the impetus for the other midstream projects we’ll dive into today. The biggest news, of course, is that the long-sought pipeline looks like it is finally happening. There are three main events that shifted the odds in favor of MVP in recent months just as it was looking like it would languish under the weight of endless legal battles. The first was the Fiscal Responsibility Act of 2023 (FRA), which was signed into law in early June and included a rare mandate from Congress to permit and complete MVP. As we detailed in Rescue Me, the provision stripped the U.S. Fourth Circuit Court of Appeals of jurisdiction, prohibited any further challenges to the state and federal permits, and, for those wanting to challenge the FRA provision itself, it restricted jurisdiction to the DC Circuit Court. The second was the Supreme Court decision to grant MVP’s emergency appeal and negate the Fourth Circuit’s ruling to stay construction even after the FRA was signed. And finally, the third was the lower court’s decision to dismiss pending petitions against MVP given the FRA took away its jurisdiction to hear them.
There’s still some risk to MVP’s completion and timing. For one thing, there’s a lingering eminent domain case in the DC Circuit that could still throw a wrench in the gears for the project. Separately, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a Notice of Proposed Safety Order (NOPSO) to Equitrans on August 11 related to concerns that years of construction delays could have affected pipeline integrity. The resulting inspections, possible remediation, and third-party testing related to this order could delay completion, as could extreme weather if construction extends into the winter months. But barring major setbacks related to these risks, the odds have shifted in favor of MVP completion, for the first time in a long while, and we could see the pipeline come online later this year or in early 2024.
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