August 4, 2018 / 6:38 PM / 14 days ago

U.S. halts construction on EQT W.Va.-Va. Mountain Valley gas pipeline

Aug 4 (Reuters) - U.S. energy regulators have told EQT Corp and other companies building the $3.5-$3.7 billion Mountain Valley natural gas pipeline from West Virginia to Virginia to stop all construction.

The action by the U.S. Federal Energy Regulatory Commission (FERC), in a filing on Friday, followed a July 27 order from the U.S. Court of Appeals for the Fourth Circuit that vacated decisions by the Department of the Interior's Bureau of Land Management (BLM) and the Department of Agriculture's Forest Service authorizing construction of Mountain Valley across federal lands.

That court decision was the most recent appeals court victory by the Sierra Club and other opponents of the pipeline.

Mountain Valley is one of several pipelines under construction to connect growing output in the Marcellus and Utica shale basins in Pennsylvania, West Virginia and Ohio with customers in other parts of the United States and Canada.

FERC said in its decision Friday that it cannot predict when the BLM or Forest Service may act or whether the agencies will ultimately approve the same route for Mountain Valley.

"Should the agencies authorize alternative routes, (Mountain Valley) may need to revise substantial portions of the project route across non-federal lands, possibly requiring further authorizations and environmental review," FERC said in its filing.

In response to the FERC order, EQT spokeswoman Natalie Cox said in an email on Saturday the company "respectfully disagrees with the breadth of the August 3 stop work order."

"We will continue to work closely with all agencies to resolve these issues and look forward to continuing the safe construction of this important infrastructure project," Cox said.

Before the FERC decision, EQT delayed its target date to finish the pipeline to the first quarter of 2019 from late 2018.

Analysts at Height Capital Markets in Washington, however, projected the project may not enter service until the fourth quarter of 2019.

The 303-mile (488-kilometer) pipeline is designed to deliver 2 billion cubic feet per day of gas to meet growing demand for the fuel for power generation and other uses in the U.S. Southeast and Mid-Atlantic.

One billion cubic feet is enough gas to supply about 5 million U.S. homes for a day.

Mountain Valley is owned by units of EQT, NextEra Energy Inc , Consolidated Edison Inc, AlatGas Ltd and RGC Resources Inc. EQT Midstream Partners LP will operate the pipeline and owns a significant interest in the venture.

Reporting by Scott DiSavino Editing by Tom Brown

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