Equitrans: The U.S. Supreme Court Concludes MVP’s Shakespearean Epic; Et Tu, Fourth Circuit?

The U.S. Supreme Court has granted an emergency petition from the Mountain Valley Pipeline’s lawyers after stay orders from the U.S. Court of Appeals for the Fourth Circuit from earlier July had halted construction. This decision effectively means the pipeline can resume construction and remains on track to be in service by the end of this year. While the decision is considered temporary and provisional, further delays in the pipeline’s construction would likely add hundreds of millions to the construction tab, so this remains a good outcome for the MVP. Sen. Joe Manchin, D-W.Va., and the Biden Administration filed supporting briefs with the Supreme Court.

At issue is the constitutionality of the specific provision inserted in the Fiscal Responsibility Act, signed into law in June, specifically clearing the way in terms of legal and permitting roadblocks for the Mountain Valley Pipeline to move into service. The Supreme Court writ was issued as the case was also being argued in the Fourth Circuit, effectively invalidating the proceedings. While the Fourth Circuit can still issue an opinion, the U.S. Supreme Court has sent a very strong signal that the lower court lacks jurisdiction. Environmental groups can continue to file challenges, but it looks unlikely that the Fourth Circuit will issue further stays.

The pipeline remains a critical conduit for connecting the infrastructure-constrained Appalachian region to the broader Gulf Coast gas complex, indirectly helping U.S. liquefied natural gas exports. Equitrans owns 48% of the pipeline via a subsidiary and will be the operator. With the pipeline in service, it will benefit Appalachian producers, as well as midstream peers like Williams, which will benefit from incremental volumes and investments supporting its network. We maintain our $15 fair value estimate and narrow moat rating for Equitrans ETRN.