Fitch Ratings, one of the leading firms that provides credit ratings, commentary and economic research, has voiced doubts about the viability of the Mountain Valley Pipeline. In a January 28 issue of its Fitch Wire, the firm stated:
President Joe Biden’s executive order that revoked Keystone XL’s Presidential Permit may be an indicator of his administration’s aversion to long-distance projects in US midstream energy, says Fitch Ratings. We believe Energy Transfer’s Dakota Access Pipeline (DAPL), Equitrans Midstream’s Mountain Valley Pipeline (MVP) and Enbridge’s Line 3 Replacement are at risk of interference. Interference could have credit implications for the midstream energy companies involved in these projects but would be considered on an individual issuer basis.
Equitrans’ operating subsidiary EQM Midstream (BB/Negative) continues to experience delays and cost overruns with MVP due to environmental and regulatory challenges, including securing permits, which has led to a Negative Outlook. The in-service date is now expected to be late 2021. EQM plans to modify MVP’s construction program because of the Fourth Circuit Court of Appeals ruling on a topic pertaining to the Army Corps of Engineers. Fitch remains concerned about execution of the project. EQM’s earnings growth and the strengthening of its balance-sheet metrics are largely dependent on the completion of MVP.
For the complete Fitch Wire commentary, click here.