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Equitrans Midstream Idea Proposal (EQM, ETRN)

Equitrans Midstream Idea Proposal (EQM, ETRN)
 

Will Equitrans Midstream successfully navigate its remaining legal hurdles and complete the Mountain Valley Pipeline?

Report Available: August 3, 2020

 

Blueshift’s initial research found EQM preparing for the completion of the Mountain Valley Pipeline (MVP) amid a cascade of both positive and negative court rulings and news regarding pipelines around the nation. The company completed its merger with ETRN in mid-June, making the combined organization one of the largest natural gas gatherers in the United States. Despite the MVP being 92% complete and the joint venture partners remaining loyal to the project, the pipeline still faces significant regulatory and environmental challenges that could prevent final completion.

 

Observations

  1. In early June, the Mountain Valley Pipeline LLC (MVP), a joint venture of five energy companies including EQM Midstream Partners (EQM), Roanoke Gas, NextEra Energy Capital Holdings, Con Edison Transmission, and WGL Midstream announced a schedule and timing update in preparation for the restart of construction and completion of its 303-mile natural gas transmission line. MVP now expects full in-service operations in early 2021 with cost increasing to $5.7 billion from the original $3.7 billion. MVP has yet to secure all of the required permits to lift a Stop Work Order and it still has to secure permits for crossing the Jefferson National Forest and Appalachian Trail. Management remains confident that it will be successful obtaining all of the required documents in the near future.
  2. Recent positive business news and judicial decisions that could be favorable for the completion of the MVP include:
  • In late June, The Federal Energy Regulatory Commission authorized the construction of the MVP extension. Called MVP Southgate it will start in Pittsylvania County and run south for another 75 miles.
  • The June Supreme Court decision to allow the Atlantic Coast Pipeline to cross the Appalachian Trail could be a positive precedent for the MVP’s permit to cross the trail.
  • A June announcement that the MVP joint venture partners are sticking with the project and have no plans to exercise their right to withdraw from the contract.
  • The U.S. Supreme Court issued a stay July 6th of a Montana judge’s decision to ban a fast-track permitting process that allows pipelines to cross water bodies. The MVP needs such a permit to burrow under nearly 1,000 streams, rivers and wetlands on its way from northern West Virginia to Pittsylvania County.
  1. Recent negative news and court decisions that could continue to delay the MVP include:
  • Virginia regulators seeking an additional $86,000 in fines for environmental infractions from the MVP. This is on top of the $2.15 million settlement reached last year.
  • Atlantic Coast Pipeline developers abandoned their entire project due legal and regulatory battles that caused a 3.5 year delay and added $3 billion to the estimated cost.
  • A U.S. District Judge in Washington D.C. ordered the Dakota Access pipeline shut down pending additional environmental reviews more than three years after it began pumping oil.
  1. Blueshift Research’s 26, 2019, EQM report found mixed opinions regarding the on-time completion of the Mountain Valley Pipeline (MVP) project. The prevailing thought was toward successful completion—but not by its projected mid-2020 in-service date. Despite past problems, work stoppages, and what most sources consider poor project management, nine sources expected the MVP project to overcome its legal, permitting, environmental, and construction challenges and eventually be completed. Six sources were unsure or believed final construction of the MVP would be halted.

 

Will the MVP project meet it new completion date of early-2021? Will it be completed at all? What are the chances the MVP will be granted the necessary permits to resume construction? What headwinds and roadblocks could further delay the project? Is there a risk that project partners and customers could abandon support of the project? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: MVP contractors and suppliers, Pipeline operators, Local, state and federal government officials, Environmental groups, and Industry specialists.  

 

Companies: AltaGas Ltd. (TSX:ALA) Con Edison (ED), Equitrans Midstream Corp. (ETRN), NextEra Energy Inc. (NEE), and RGC Resources Inc. (RGCO)

 

Research Begins: July 20, 2020

 

To see other ideas Blueshift Research is currently working on, please click here.

 

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