Dominion cancels Atlantic Coast Pipeline, sells pipeline assets

Dominion Energy Inc. has cancelled its 1.5-bcfd Atlantic Coast Pipeline (ACP) project, citing “too much legal uncertainty.” The pipeline was to carry Marcellus shale natural gas production from West Virginia across Virginia to North Carolina.

The US Supreme Court ruled 7-2 June 15 that the US Forest Service properly exercised its authority under the Mineral Leasing Act of 1920 to grant a permit for ACP to pass through a national forest beneath the Appalachian Trail. The decision overturned one of several judgments by the US Court of Appeals for the Fourth Circuit, but left the case pending before that appellate court (OGJ Online, June 16, 2020).

US Senator Joe Manchin (D-WV) said "I’m disappointed to learn plans to build the Atlantic Coast Pipeline have been cancelled. The Atlantic Coast Pipeline project took meaningful steps to ensure the pipeline was safely constructed and the Appalachian Trail and surrounding areas were protected." The National Resources Defense Council said "This is tremendous news for West Virginians, Virginians, and North Carolinians who deserve clean air, safe water, and protection from climate change. The costly and unneeded Atlantic Coast pipeline would have threatened waterways and communities across its 600-mile path. Its cancellation also marks a victory for Virginians in Union Hill whose concerns about a proposed gas compressor station were repeatedly ignored, and for tribal communities in North Carolina who were similarly rebuffed by state and federal agencies."

ACP was approved by the US Federal Energy Regulatory Commission in October 2017. Owners in addition to Dominion are Southern Co. and Duke Energy Corp., including Duke subsidiary Piedmont Natural Gas.

Dominion also agreed to sell substantially all of its gas transmission and storage segment to an affiliate of Berkshire Hathaway Inc. in a transaction valued at $9.7 billion, including the assumption of $5.7 billion of debt. Dominion retained its 50% interest in Cove Point LNG in Maryland.

The company said the sale reflects its focus on state-regulated utilities. Dominion expects that as much as 90% of its future operating earnings will come from its electric and natural gas state-regulated utility companies.