Mountain Valley Pipeline LLC, a joint venture between affiliates of EQT Corp. (NYSE: EQT) and NextEra Energy Inc. (NYSE: NEE) says that a subsidiary of WGL Holdings Inc. (NYSE: WGL), WGL Midstream, has acquired a 7% ownership interest in the joint venture, and that a subsidiary of Vega Energy Partners Ltd., Vega Midstream MVP LLC, has acquired a 3% interest. NextEra Energy will hold a 35% interest; and, as previously announced, EQT Midstream Partners LP (NYSE: EQM) is expected to assume EQT’s 55% majority interest in the joint venture and to operate the proposed Mountain Valley Pipeline.
“WGL Midstream’s agreement with Mountain Valley Pipeline helps to address the growing transportation constraints facing natural gas producers and, more importantly, offers critical supply diversity to meet the increasing demand for natural gas in the mid-Atlantic region and Southeast markets,” said WGL Chairman and CEO Terry D. McCallister. “As the need for natural gas continues to increase in these fast growing markets, WGL is well positioned with customized energy solutions to meet this growth through our evolving business capabilities.”
As part of the agreement, WGL Midstream will be a shipper on the proposed Mountain Valley Pipeline (MVP) – and has also committed to buying a significant amount of natural gas at Transcontinental Gas Pipeline Co.’s (Transco’s) Zone 5 compressor station 165 in Pittsylvania County, Virginia.
“WGL has a major presence in this market and currently moves significant volume on Transco’s mainline; therefore, securing them as a joint venture partner validates the market’s need for additional energy supply sources at station 165 – and also reaffirms our commitment to provide a safe, reliable supply of Appalachian-produced natural gas to regional markets in the mid-Atlantic and Southeast United States,” stated Randy Crawford, senior vice president of EQT Corp. and COO of EQT Midstream Partners.
With its connection to the existing Equitrans system in West Virginia, the MVP is specifically designed to address infrastructure constraints associated with the rapid development of natural gas from the Marcellus and Utica shale plays, while offering critical supply diversity to meet the increasing demand for natural gas across the Southeast. The MVP is expected to provide at least 2 Bcf per day of firm transmission capacity and has secured commitments at 20-year terms for this minimum capacity amount. The estimated 300-mile-long pipeline is currently targeted at 42 inches in diameter, with an approximate project cost of $3–$3.5 billion.