Two American energy giants who are planning to build a gas pipeline crossing the Appalachian mountain range, Duke Energy and Dominion Energy, announced Sunday that they have given up on the controversial project.
Dominion Energy has also announced its intention to sell its natural gas transportation and storage assets to the holding company of American businessman Warren Buffett for $ 9.7 billion.
The company, in partnership with Duke Energy, announced in 2014 its intention to build the Atlantic Coast Pipeline.
But “delays and growing uncertainty about costs (…) threaten the economic viability of the project,” say the two companies in a joint statement.
The pipeline, which was to cross the Appalachian mountain range, had drawn particular criticism and legal action from environmental organizations.
The Supreme Court ruled in June in favor of the two companies.
Another trial, however, is underway and contributes, among other factors, “to make the project too uncertain to justify investing even more of our shareholders’ money”, consider Duke Energy and Dominion Energy.
Due to legal issues, the anticipated cost of the project has gone from $ 4.5 billion or $ 5 billion to $ 8 billion, they say.
If successful, the project should also enter into service in early 2022, which would be three and a half years behind initial projections.
The decision to abandon the pipeline “reflects the growing legal uncertainty overhanging the development of large-scale energy and industrial infrastructure in the United States,” said the bosses of the two companies, quoted in the statement.
In addition to abandoning this project, Dominion Energy plans to dispose of 7,700 miles (12,400 km) of pipeline and 25.5 billion cubic meters of natural gas storage space by selling them to Mr. Holding. Buffett, Berkshire Hattaway.
The transaction also includes the sale of 25% of the Cove Point terminal in Maryland, on the east coast of the United States, from which natural gas is exported abroad.
Berkshire Hattaway, which already manages more than $ 100 billion in assets in the energy sector, will repay $ 4 billion in cash to Dominion and take over $ 5.7 billion in debt.
It is the first major acquisition of the holding company of Mr. Buffett, known for his participation in large companies at difficult times, since the beginning of the pandemic and the economic crisis that ensued.
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