Dominion delays U.S. Atlantic Coast natgas pipe, boosts costs

(Reuters) - Dominion Energy Inc said on Friday the estimated cost of its Atlantic Coast natural gas pipeline from West Virginia to North Carolina has risen to $7.0 billion-$7.5 billion, adding that it has delayed the expected completion date to early 2021.

The company said previously the project would cost an estimated $6.5 billion-$7.0 billion, excluding financing, and be completed in mid 2020 due to delays caused by numerous environmental lawsuits.

“We remain highly confident in the successful and timely resolution of all outstanding permit issues as well as the ultimate completion of the entire project,” Dominion Chief Executive Thomas Farrell said in the company’s fourth-quarter earnings release.

He noted the company was “actively pursuing multiple paths to resolve all outstanding permit issues including judicial, legislative and administrative avenues.”

Earlier this week, the U.S. Fourth Circuit Court of Appeals stayed a previous court decision against U.S. Forest Service permits that allowed Dominion to build the Atlantic Coast pipeline across national forests and the Appalachian Trail.

Dominion said it expects construction could recommence on the full 600-mile (966-kilometer) pipeline route during the third quarter of 2019, with partial in-service in late 2020.

When the company started work on Atlantic Coast in the spring of 2018, Dominion said it expected the project would cost an estimated $6.0 billion-$6.5 billion and be completed in late 2019.

That was before the company suspended construction in early December after the Fourth Circuit Court stayed a permit from the U.S. Fish and Wildlife Service that authorized the pipe to be built in areas inhabited by threatened or endangered species.

Atlantic Coast is designed to carry 1.5 billion cubic feet per day (bcfd) from the Marcellus and Utica shale in Pennsylvania, Ohio and West Virginia to the U.S. Southeast.

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

Atlantic Coast is not the only big pipeline fighting environmental groups in court over permits.

EQM Midstream Partners LP is facing similar challenges in its quest to build the Mountain Valley gas pipe from West Virginia to Virginia, which is now at least $1 billion over budget and a year behind schedule.

Separately, Dominion said it expects the 38-mile Supply Header project in West Virginia and Pennsylvania, which will feed gas into Atlantic Coast, will enter service in late 2020 at a cost of $650 million-$700 million.

Previously, the company said Supply Header would cost around $500 million and enter service in late 2019.

Reporting by Scott DiSavino; Editing by Dan Grebler