Mountain Valley Pipeline announces new partner

Mountain Valley Pipeline, LLC, a joint venture between affiliates of EQT Corporation and NextEra Energy, Inc. has announced that a subsidiary of WGL Holdings, Inc., WGL Midstream, has acquired a 7% ownership interest in the joint venture, and a subsidiary of Vega Energy Partners, Ltd., Vega Midstream MVP LLC, has acquired a 3% interest.

NextEra Energy will hold a 35% interest; and as previously announced, EQT Midstream Partners, LP is expected to assume EQT’s 55% majority interest in the joint venture and to operate the proposed Mountain Valley Pipeline.

“WGL Midstream’s agreement with Mountain Valley Pipeline helps to address the growing transportation constraints facing natural gas producers and, more importantly, offers critical supply diversity to meet the increasing demand for natural gas in the mid-Atlantic region and Southeast markets,” said WGL Chairman and Chief Executive Officer, Terry D. McCallister. “As the need for natural gas continues to increase in these fast growing markets, WGL is well positioned with customised energy solutions to meet this growth through our evolving business capabilities.”

As part of the agreement, WGL Midstream will be a shipper on the proposed Mountain Valley Pipeline (MVP) – and has also committed to buying a significant amount of natural gas at Transcontinental Gas Pipeline Company’s (Transco) Zone 5 compressor station 165 in Pittsylvania County, Virginia – a highly marketable trading area along the East Coast.

“WGL has a major presence in this market and currently moves significant volume on Transco’s mainline; therefore, securing them as a joint venture partner validates the market’s need for additional energy supply sources at station 165 – and also reaffirms our commitment to provide a safe, reliable supply of Appalachian-produced natural gas to regional markets in the mid-Atlantic and Southeast US,” stated Randy Crawford, Senior Vice President, EQT Corporation; and Chief Operating Officer, EQT Midstream Partners.

With its connection to the existing Equitrans system in West Virginia, the MVP is specifically designed to address infrastructure constraints associated with the rapid development of natural gas from the Marcellus and Utica shale plays, while more importantly offering critical supply diversity to meet the increasing demand for natural gas across the Southeast. The MVP is expected to provide at least 2 billion ft3/d of firm transmission capacity and has secured commitments at 20 year terms for this minimum capacity amount. The estimated 300 mile long pipeline is currently targeted at 42 in. dia., with an approximate project cost of US$3 - US$3.5 billion.

“The addition of WGL Midstream continues to support the overall importance of this project to the region,” said TJ Tuscai, President, NextEra US Gas Assets. “This project will support economic growth and energy supply diversity in the Southeast and mid-Atlantic for years to come.”

Subject to approval by the Federal Energy Regulatory Commission (FERC), the MVP is expected to be in-service during the fourth quarter of 2018. Mountain Valley Pipeline, LLC began the FERC pre-filing process in October 2014 and recently held a series of 14 community open houses along the proposed route in West Virginia and Virginia. In addition, several alternative routes are currently being evaluated in order to continuously improve and strengthen the proposed route by ensuring the least overall impact on landowners, the environment, and cultural resources.

Adapted from press release by Hannah Priestley-Eaton

Published on 12/03/2015

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