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US Mountain Valley natural gas pipeline begins operations



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June 14 (Reuters) -U.S. natural gas pipeline venture Mountain Valley Pipeline said its long-delayed pipe from West Virginia to Virginia entered service on Friday.

The $7.85 billion Mountain Valley project was the biggest gas pipeline under construction in the U.S. Northeast. It has encountered numerous regulatory and court fights that have stopped work several times since construction began in 2018.

The pipe, which unlocks gas supplies from Appalachia, the nation's biggest shale gas-producing region, needed a bill from the U.S. Congress that was signed into law by President Joe Biden and help from the Supreme Court before it could restart construction in 2023.

The pipe is now available for interruptible or short-term firm transportation service until long-term firm capacity obligations commence on July 1, U.S. gas pipeline company Equitrans Midstream ETRN.N, the lead partner in the Mountain Valley venture, said in a statement.

The pipeline is designed to carry up to 2 billion cubic feet per day (bcfd) of gas from the Marcellus and Utica shale production regions in Pennsylvania, Ohio and West Virginia to local distribution companies, power generation facilities, industrial users and others in growing demand markets in the U.S. Mid-Atlantic and Southeast, Equitrans said.

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

Energy analysts, however, noted it could still take months for Mountain Valley to reach its full capacity due to ongoing downstream pipeline constraints.

The pipeline had faced legal challenges and opposition from local community and environmental groups who say it will exacerbate fossil-fuel driven climate change.

“Allowing this 303-mile disaster to move forward is a slap in the face to the communities who have fought tirelessly over the last decade to protect their land and water," Sierra Club Deputy Chief Energy Officer Patrick Grenter said in a statement this week.

"This pipeline has already marred private property and damaged countless water resources, and the gas it will transport will worsen the climate crisis. We will continue to fight back against the reckless expansion of dangerous, unnecessary fracked gas pipelines.”

When Mountain Valley started construction in February 2018, Equitrans, the primary interest owner in the joint venture, estimated the project would cost about $3.5 billion and enter service by late 2018.

The Mountain Valley project is owned by units of Equitrans, NextEra Energy NEE.N, Consolidated Edison ED.N, AltaGas ALA.TO and RGC Resources RGCO.O. Equitrans will operate the pipeline.

Analysts said they expect EQT EQT.N, the nation's biggest gas producer, to move the most gas through Mountain Valley.

Earlier this week, EQT's CEO Toby Rice said EQT was starting to increase output after cutting back earlier in the year when futures prices NGc1 fell to 3-1/2-year lows in February and March.

EQT agreed in March to buy Equitrans in an all-stock deal, which is expected to close in the fourth quarter. That would bring back the pipeline business that EQT spun off in 2018.



Reporting by Kavya Balaraman and Rahul Paswan in Bengaluru and Scott DiSavino in New York; Editing by Chizu Nomiyama and Aurora Ellis

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