Dominion Energy is buying The Southern Co.’s 5% share in the Atlantic Coast Pipeline (ACP) for $175 million, Kallanish Energy learns.
Currently under construction, the projected cost of the 600-mile natural gas pipeline has increased to $8 billion, up considerably from the estimated $4.5 billion to $5 billion price tag when the project was announced in the fall of 2014.
The deal makes Richmond, Virginia-based Dominion the majority partner in the ACP with a 53% stake. Charlotte, North Carolina-based Duke Energy Corp. is now minority partner, with its share remaining at 47%.
Dominion CEO Thomas Farrell III said the agreement underscores “our confidence in the successful completion of the project,” despite significant court and regulatory challenges to the line, the Charlotte Business Journal reported.
Jim Chapman, Dominion chief financial officer, said nothing changes about the project other than the ownership shares.
Anchor customers on the line are Duke, whose North Carolina utilities are purchasing the largest share of the project at 1.5 billion cubic feet capacity for natural gas plants and for Piedmont Natural Gas, Dominion and Southern.
The pipeline would transport natural gas from the Utica and Marcellus Shale plays from West Virginia to southern coastal Virginia and then through eastern North Carolina to Robeson County.
The partners raised their estimated costs for the project to between $7.3 billion and $7.8 billion a year ago. But, at the time, they warned costs could go higher because of court challenges. Diane Leopold, Dominion’s chief operating officer and the executive in charge of the ACP project, said court and permitting delays were primarily responsible for the higher estimate.
One of the principal court challenges is slated to go before the U.S Supreme Court for oral arguments on Feb. 24. That is the ACP’s appeal of a Fourth Circuit ruling. The court last year ruled the U.S. Forest Service had improperly granted the pipeline a permit to cross two national forests, the Blue Ridge Parkway and the Appalachian Trail.
The pipeline is expected to be completed by the end of 2021.
This post appeared first on Kallanish Energy News.