UPDATE 1-U.S. court vacates federal permit for WV-VA Mountain Valley natgas pipe

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(Adds analyst comment)

Jan 25 (Reuters) - The U.S. Court of Appeals for the 4th Circuit on Tuesday invalidated federal approvals for Equitrans Midstream Corp's $6.2 billion Mountain Valley natural gas pipeline under construction from West Virginia to Virginia.

The court decision was the latest setback for the pipeline, which was already years behind schedule and billions over budget.

Specifically, the court vacated the record of decisions of the U.S. Forest Service and the Bureau of Land Management allowing the pipe to cross about 3.5-miles (5.6-kilometers) through the Jefferson National Forest, and sent the case back to the agencies.

In an email, Equitrans said "We are thoroughly reviewing the Court’s decision regarding (Mountain Valley's) crossing permit for the Jefferson National Forest and will be expeditiously evaluating the project’s next steps and timing considerations."

In the past, Equitrans has said it expected the project to enter service during the summer of 2022.

Analysts at ClearView Energy Partners LLC said the loss of the permit likely means "completion of the pipeline this calendar year now looks unlikely."

Mountain Valley is one of several U.S. pipelines delayed by regulatory and legal fights with environmental and local groups that found problems with federal permits issued during President Donald Trump's administration.

When Mountain Valley construction started in February 2018, Equitrans estimated the 303-mile (488-km), 2.0-billion-cubic-feet-per-day (bcfd) project would cost about $3.5 billion and enter service by late 2018.

"Today’s decision makes it highly unlikely that this dirty, dangerous, and unnecessary fracked gas pipeline will ever be completed," said Kelly Sheehan, senior director of energy campaigns at the Sierra Club, which along with other environmental groups filed the latest lawsuit.

Equitrans, which has a roughly 47.8% ownership interest in Mountain Valley and will operate the pipe, said it has funded about $2.4 billion of the project as of Sept. 30.

The Mountain Valley venture is owned by units of Equitrans, NextEra Energy Inc, Consolidated Edison Inc, AltaGas Ltd and RGC Resources Inc.

(Reporting by Scott DiSavino Editing by Paul Simao and Aurora Ellis)

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