(Reuters) - EQM Midstream Partners LP (EQM.N) told U.S. federal regulators the company would stop some work on its long-delayed Mountain Valley natural gas pipeline from West Virginia to Virginia as the U.S. Fish and Wildlife Service reviews a couple of permits.
Despite the delay, analysts on Friday said they expect Mountain Valley will enter service in the third or fourth quarter of 2020. The company has said the $4.8-$5.0 billion pipe would enter service in mid-2020.
Officials at EQM were not immediately available for comment.
In a letter to the U.S. Federal Energy Regulatory Commission (FERC) on Thursday, EQM said it was voluntarily suspending new work on Mountain Valley in areas where such activities present a potential risk to endangered species or destruction of critical habitat areas.
EQM’s decision to suspend work was in response to a lawsuit filed by the Sierra Club earlier this week in the U.S. Court of Appeals for the Fourth Circuit, according to analysts at Height Capital Markets in Washington.
In that case, the Sierra Club asked the court to vacate Mountain Valley’s biological opinion and incidental take statement, which allow construction of the pipe in areas inhabited by threatened or endangered species.
The analysts said they do not expect the Fish and Wildlife Service or EQM will pursue litigation since the Fourth Circuit would likely side with the Sierra Club as the court did in a case against another long-delayed project - Dominion Energy Inc’s (D.N) Atlantic Coast pipe from West Virginia to North Carolina.
Instead, EQM decided to voluntarily suspend work, the analysts said, noting the company had already completed work in those areas or was already barred from working in them until it gets a new permit from the U.S. Army Corps of Engineers that would allow the pipe to cross streams and other waterbodies.
Height Capital expects the Army Corps will reissue the permit in coming months.
When EQM started construction in February 2018, it estimated Mountain Valley would cost about $3.5 billion and be completed by the end of 2018.
The 303-mile (488-km) pipeline is designed to deliver 2 billion cubic feet per day (bcfd) of gas. One billion cubic feet is enough gas to supply about 5 million U.S. homes for a day.
Reporting by Scott DiSavino, Editing by Tom Brown