Dominion to resume work on U.S. Atlantic Coast natgas pipe in third quarter

(Reuters) - Dominion Energy Inc said on Friday it expects to resume construction of the $7.0 billion-$7.5 billion Atlantic Coast natural gas pipeline from West Virginia to North Carolina in the third quarter and complete it by early 2021, despite legal and regulatory challenges.

“It’s been a very frustrating process, but we are winding our way through it ... and we’re making progress,” Dominion Chief Executive Thomas Farrell said on Dominion’s first-quarter earnings call.

The company still needs to resolve two major legal cases before it can complete the project, which has been on hold since late last year.

Atlantic Coast is designed to carry 1.5 billion cubic feet per day of gas from the Marcellus and Utica shale in Pennsylvania, Ohio and West Virginia to the U.S. Southeast. One billion cubic feet is enough gas for about five million U.S. homes for a day.

Dominion suspended construction in early December after the U.S. Court of Appeals for the Fourth Circuit stayed a permit from the U.S. Fish and Wildlife Service that authorized building the pipe in areas inhabited by threatened or endangered species.

The company said oral arguments in that case will be presented on May 9, with a decision expected about 90 days later. Dominion said a positive decision would allow it to restart partial construction in the third quarter.

Dominion is also seeking an order from the U.S. Supreme Court overturning a Fourth Circuit decision that invalidated the U.S. Forest Service’s authorization to build the pipe across the Appalachian Trail.

That case, if the Supreme Court takes it up, would be heard in 2020, so full construction would resume after that decision, Dominion said.

When the company started work on the 600-mile (966-km) 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. Since then, Dominion has upped the project costs and extended the timeline.

Atlantic Coast is a partnership between units of Dominion, Duke Energy Corp and Southern Co.

Reporting by Scott DiSavino; Editing by Richard Chang