Mountain Valley Pipeline LLC, a joint venture between affiliates of EQT Corp. (NYSE: EQT) and NextEra Energy (NYSE: NEE), said March 11 that a subsidiary of WGL Holdings (NYSE: WGL), 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 EQT Midstream Partners LP (NYSE: EQM) is expected to assume EQT’s 55% majority interest in the joint venture and to operate the proposed, 300-mile 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 CEO Terry D. McCallister. “As the need for natural gas continues to increase in these fast growing markets, WGL is well positioned with customized energy solutions to meet this growth through our evolving business capabilities.”
As part of the agreement, WGL Midstream will be a shipper on the Mountain Valley Pipeline (MVP) – and has also committed to buying a significant amount of natural gas at Transcontinental Gas Pipeline Co.’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 United States,” stated Randy Crawford, senior vice president of EQT Corp. and chief operating officer of 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 offering critical supply diversity to meet the increasing demand for natural gas across the Southeast. The MVP is expected to provide at least 2 Bcf per day 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 inches in diameter, with an approximate project cost of $3 billion-$3.5 billion.
“The addition of WGL Midstream continues to support the overall importance of this project to the region,” said TJ Tuscai, president of 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, the MVP is expected to be in-service during the fourth quarter of 2018. Mountain Valley Pipeline 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.
WGL, headquartered in Washington, D.C., is a leading source for clean, efficient and diverse energy solutions. With activities in 32 states and the District of Columbia, WGL consists of Washington Gas, WGL Energy, WGL Midstream and Hampshire Gas.
EQT Corp. is an integrated energy company with emphasis on Appalachian area natural gas production, gathering, and transmission. EQT is the general partner and significant equity owner of EQT Midstream Partners LP. EQT Midstream Partners is a growth-oriented limited partnership formed by EQT Corp. to own, operate, acquire, and develop midstream assets in the Appalachian Basin.
NextEra Energy is a leading clean energy company with consolidated revenues of approximately $17.0 billion, approximately 44,900 megawatts of generating capacity, which includes megawatts associated with noncontrolling interests related to NextEra Energy Partners LP (NYSE: NEP), and approximately 13,800 employees in 27 states and Canada as of year-end 2014.
Vega Energy Partners is a privately-held company located in Houston, Texas. Through its predecessor companies, Vega and its principals have been engaged in the management, optimization, and development of natural gas assets for over 25 years.