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MVP Southgate natgas pipe startup seen in 2021 despite N.Carolina permit denial

Aug 12 (Reuters) - The companies developing the Mountain Valley Southgate natural gas pipeline expansion from Virginia to North Carolina said on Wednesday they continue to target a 2021 startup for the project after North Carolina regulators denied a water permit.

The North Carolina Department of Environmental Quality (DEQ) denied the permit on Tuesday due to uncertainty around whether Equitrans Midstream Corp will ever complete the $5.4 bllion-$5.7 billion Mountain Valley Pipeline (MVP) from West Virginia to Virginia. A unit of Equitrans is leading the MVP project.

“We are disappointed by the decision,” project spokesperson Shawn Day said, noting “Work on MVP is 92% complete, and that project is targeted to enter service in early 2021.”

Mountain Valley is one of several U.S. oil and gas pipelines delayed by regulatory and legal fights with environmental and local groups that found problems with federal permits issued by the Trump administration.

Other projects similarly held up include Dominion Energy Inc’s $8 billion Atlantic Coast gas pipe that was canceled in July.

The North Carolina rejection caused some analysts to question whether Equitrans will be able to finish Southgate by the end of 2021, if ever.

“We are skeptical the DEQ will issue the permit until MVP is fully operating, if ever,” analysts at Height Capital Markets in Washington, D.C., said, noting they expect MVP to enter service in 2021.

When Equitrans started construction on MVP in February 2018, it estimated the project would cost about $3.5 billion and enter service by the end of 2018.

The 303-mile (488-kilometer) MVP mainline is designed to carry 2 billion cubic feet per day (bcfd) of gas from the Marcellus and Utica Shale in Pennsylvania, West Virginia and Ohio.

The 75-mile Southgate extension is designed to carry 0.3 bcfd to Dominion’s North Carolina subsidiary and could be expanded to 0.9 bcfd.

Reporting By Scott DiSavino Editing by Marguerita Choy