FERC Extends Timeline for MVP Southgate

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.

Appalachian natural gas producers got good news earlier this month: Williams announced it was moving forward with the Southeast Supply Enhancement project, a large-scale expansion of southbound capacity out of the Northeast on its Transco Pipeline system. Not only that, but it super-sized the project to 1.4 Bcf/d of capacity — nearly double the 800 MMcf/d it had offered in an open season held this summer. The project is one of several brownfield expansions planned to provide additional supply access in Transco’s premium Zone 5 market area, which runs through Virginia and North Carolina — and the first large-scale takeaway expansion to be announced in the area since the long-delayed Mountain Valley Pipeline (MVP) was cleared for completion following years of regulatory and legal hurdles. In today’s RBN blog, we provide the latest on the Transco Corridor expansions.

Appalachia natural gas producers hoping to get a big boost in pipeline takeaway capacity later this year were dealt some bad news recently. On May 4, Equitrans Midstream officially pushed back the in-service date for the already-delayed Mountain Valley Pipeline. The 2-Bcf/d, greenfield project is the last of the major planned expansions that would add substantial capacity from the prolific Appalachia gas-producing region and help stave off severe seasonal pipeline constraints, at least in the near- to midterm. Previous guidance had it coming online late this year, but Equitrans said it is now targeting start-up in the summer of 2022, pending water and wetland crossing permit reviews. The news is far from surprising considering the numerous regulatory and legal challenges midstream projects, including MVP, have previously faced in the Northeast over the past decade or so. But the resulting uncertainty leaves Northeast producers in a tight spot. In today’s blog, we will consider the implications of the MVP delay for Appalachia’s outflows.