Dominion Energy Inc. raised its project cost estimates for the Atlantic Coast natural gas pipeline project and the related Supply Header project by about $500 million, citing regulatory delays.

Dominion now expects to spend between $6.5 billion and $7 billion on the projects, up from the previous estimate of $6 billion to $6.5 billion, excluding financing costs, according to a Nov. 1 earnings release. The company cited the Federal Energy Regulatory Commission's stop-work order and delays in acquiring the necessary permits as the primary reasons for the project cost increase.

Earlier in the year, Duke Energy Corp. reported an increase in project costs in its 2017 annual report. The pipeline developers originally expected to spend between $5 billion and $5.5 billion on project construction.

To accommodate peak winter demand, Atlantic Coast will implement a phased in-service approach, prioritizing the startup of sections of the pipeline serving supply-constrained regions. Atlantic Coast plans to maintain its planned in-service schedule in late 2019 for these pipeline segments. The rest of the pipeline would begin service in mid-2020. The Supply Header project is also still scheduled to start up in late 2019.

FERC in August ordered Atlantic Coast Pipeline LLC to halt construction on the projects after the U.S. Court of Appeals for the 4th Circuit canceled a right-of-way permit from the National Park Service that allowed the project to cross the Blue Ridge Parkway in Virginia. FERC lifted the order in September. The U.S. Fish and Wildlife Service and the National Park Service reissued permits to Atlantic Coast to address concerns stated in the court stay. (FERC dockets CP15-554-000, CP15-554-001, CP15-555-000)

Most recently, the Virginia Department of Environmental Quality approved water quality plans for the project, allowing Atlantic Coast to request a notice to proceed with full construction in the state from FERC.

The 600-mile, 1.5-Bcf/d pipeline would run from West Virginia through Virginia and North Carolina to deliver Appalachian gas to downstream mid-Atlantic and Southern markets. It is a joint venture of Dominion, Duke and Southern Co.