Mountain Valley seeks FERC okay for major West Virginia-Virginia gas pipeline

Mountain Valley Pipeline LLC applied Oct. 23 at the Federal Energy Regulatory Commission for a certificate of public convenience and necessity authorizing Mountain Valley to construct, own, and operate new interstate natural gas pipeline, compression, and other minor facilities located in West Virginia and Virginia, called the Mountain Valley Project.

Mountain Valley, which had already put this project into the pre-application environmental review process at FERC, now requests authorization to construct facilities that will allow it to provide up to 2.0 million dekatherms per day (MMDth/d) of firm transportation service, which has been fully subscribed, to satisfy the growing demand for natural gas by local distribution companies (LDCs), industrial users, and power generation facilities in the Mid-Atlantic and southeastern markets, as well as markets in the Appalachian region, using natural gas produced in the Appalachian Basin shale region.

The Mountain Valley Project includes construction of both pipeline and compression facilities in the states of West Virginia and Virginia. Specifically, Mountain Valley proposes to construct and operate:

  • approximately 301 miles of 42-inch diameter pipeline;
  • three new compressor stations consisting of centrifugal compressors driven by gas turbine engines providing 171,600 nominal ISO horsepower (HP) of compression; and
  • interconnections, mainline block valves, launchers and receivers, control systems, taps, and other facilities at aboveground sites.

The project will provide tie-ins with Columbia Gas Transmission LLC, Transcontinental Gas Pipe Line Co. LLC (Transco) and Equitrans LP facilities.

Mountain Valley asked the commission issue a final order approving the needed authorizations by no later than Oct. 15, 2016. That will allow Mountain Valley to commence winter tree clearing in a timely manner to minimize impacts to threatened and endangered species along the pipeline route, minimize winter construction, and allow Mountain Valley to meet its interim period and full in-service dates so that Mountain Valley’s shippers may satisfy their delivery obligations.

Following the filing of this application, Equitrans also plans to submit an application with the commission to construct and operate its Equitrans Expansion Project, which includes an interconnection with the Mountain Valley project. The environmental impacts of the Mountain Valley project and the Equitrans Expansion Project will be evaluated in the same Environmental Impact Statement.

Mountain Valley is a joint venture between affiliates of EQT Midstream Partners LP, NextEra Energy US Gas Assets LLC, WGL Midstream Inc., Vega Midstream MVP LLC and RGC Midstream LLC. The project facilities will be operated by an affiliate of EQT Corp., an integrated energy company with emphasis on Appalachian area natural gas transmission, gathering, and production.

The planned pipeline will extend from an interconnection with Equitrans’ existing H-302 pipeline near the MarkWest Liberty Midstream & Resources LLC Mobley processing facility in Wetzel County, West Virginia. It terminates at Transco’s Zone 5 Compressor Station 165, near Transco Village, in Pittsylvania County, Virginia.

Mountain Valley plans to commence construction activities in late 2016, pending receipt of all applicable permits and clearances. In order to meet the level of service offered to potential shippers, the facilities from the Mobley area to the WB Interconnect are scheduled to be placed in service no later than December 2017. The remainder of the project from the WB Interconnect to the Transco Interconnect is scheduled to be placed in service no later than December 2018.

Project seen as a key to replacement of coal-fired generation

The application noted: “The Project is designed primarily to transport growing natural gas supplies from the Appalachian Basin southeast to the Transco pipeline system (more specifically Station 165) in the Mid-Atlantic region. Transco Station 165 is the existing pooling point for Zone 5 on Transco’s system and a gas trading hub for the Mid-Atlantic market. Natural gas at this strategic point will serve not only the growing Mid-Atlantic market, but also the growing southeastern market. In addition, existing and future markets along the Mountain Valley route, such as Roanoke Gas, can receive service.”

The application added: “In recent years, the North American natural gas demand market has witnessed unprecedented growth. The United States Energy Information Administration (“EIA”) estimates that total natural gas consumption in the United States will increase from 26.2 trillion cubic feet (“Tcf”) in 2013 to between 29.7 Tcf and 37.4 Tcf in 2040. The largest portion of this growth is expected to occur in the electric generation sector, where natural gas consumption is expected to increase from 8.2 Tcf in 2013 to 9.4 Tcf in 2040. A major driver behind this increase is the retirement of 40.1 gigawatts of coal-fired electric generation by 2025.

“Recent rules promulgated under the Clean Air Act, in particular the Clean Power Plan, would likely further increase such retirement and coal-switching. Coal-fired electric generation will be replaced by a combination of natural gas and renewable generation. Currently, it is expected that more than 50 percent of new electric generation capacity will be natural gas-fired. In particular, it is expected that replacing coal-fired electric generation will be higher in the southeast because southeastern power markets include some of the most expensive delivered coal prices in the United States. These market dynamics will drive coal-fired electric generation units in the southeast to either convert to natural gas or retire.

“In addition, the population in the Mid-Atlantic and southeastern regions is expected to increase 8.70% from 2010 to 2020 and an additional 8.35% from 2020 to 2030. Mountain Valley will provide gas supplies to meet the increased demand for natural gas associated with population growth in the Mid-Atlantic and southeastern regions.”

Roanoke Gas, an affiliate of RGC Midstream LLC, will be a project shipper. Mountain Valley will construct at least one tap in Virginia for natural gas deliveries to Roanoke Gas.

Mountain Valley conducted a non-binding open season for firm transportation capacity from June 12, 2014 through July 10, 2014 followed by a binding open season from September 2, 2014 through October 21, 2014. Following the open seasons, Mountain Valley has continued to market its project while negotiating with prospective shippers. Mountain Valley executed precedent agreements with EQT Energy LLC, Roanoke Gas, USG Properties Marcellus Holdings LLC and WGL Midstream Inc. for 2.0 MMDth/day of firm transportation service on the project. As a result, the project is fully subscribed.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.