Equitrans Midstream (NYSE:ETRN) stock is surging higher by more than 35% today after President Joe Biden and House Speaker Kevin McCarthy agreed to a federal debt ceiling deal over the weekend. The resolution, which includes stipulations to approve the construction, completion and maintenance of Equitrans’ Mountain Valley Pipeline (MVP) project, would be extremely beneficial for ETRN stock.
This resolution would also provide Equitrans with all of the necessary permits and/or verifications to operate the project. The permits and/or verifications would be issued to Equitrans no later than 21 days after the passage of the debt ceiling resolution.
With Biden and McCarthy on board, the deal will now go to Congress for approval. The House could vote on the bill as soon as this Wednesday.
ETRN Stock Set to Benefit From Debt Ceiling Deal
The MVP project is a 303-mile-long natural gas pipeline stream that runs from West Virginia to southern Virginia. It’s currently about 94% complete with an estimated completion date during the second half of the year. Upon completion, the project is forecast to provide up to 2 million dekatherms of “firm transmission capacity” per day “to markets in the Mid- and South Atlantic regions of the United States.”
Equitrans is the primary owner of the MVP project. Other owners include NextEra Energy (NYSE:NEE), Consolidated Edison (NYSE:ED) and two other companies through a joint venture called EQM Midstream Partners. Quiver Quantitative notes that Equitrans has spent over half a million dollars lobbying for the project since 2020. Furthermore, Open Secrets data shows that West Virginia Senator Joe Manchin received campaign contributions from Equitrans in 2022.
Manchin said in a statement released yesterday:
“I am pleased Speaker McCarthy and his leadership team see the tremendous value in completing the MVP to increase domestic energy production and drive down costs across America and especially in West Virginia. I am proud to have fought for this critical project and to have secured the bipartisan support necessary to get it across the finish line.”
Analysts seem to be in favor of the news. This morning, RBC analyst TJ Shultz raised his ETRN stock price target to $10 due to the debt ceiling deal. Shultz characterized the news as “surprising.”
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.