Originally published for customers July 23, 2025.
What’s the issue?
A year after the Mountain Valley Pipeline (MVP) commenced operations, three new projects — SESE, MVP Southgate, and a potential compression expansion on the MVP mainline — are converging around a critical junction: Station 165.
Why does it matter?
As regional demand increases, understanding how gas moves (or gets stuck) at this point is key for assessing future transport, supply access, and contracting decisions.
What’s our view?
Transco remains the primary path into North Carolina. But with MVP fully subscribed and contracting trends shifting north, the long-term balance of supply may increasingly favor Appalachian gas, if downstream infrastructure can keep up.
A year after the Mountain Valley Pipeline (MVP) commenced operations, three new projects — SESE, MVP Southgate, and a potential compression expansion on the MVP mainline — are converging around a critical junction: Station 165. As regional demand increases, understanding how gas moves (or gets stuck) at this point is key for assessing future transport, supply access, and contracting decisions. Transco remains the primary path into North Carolina. But with MVP fully subscribed and contracting trends shifting north, the long-term balance of supply may increasingly favor Appalachian gas, if downstream infrastructure can keep up.
When we first analyzed where gas from MVP would go in 2022, we noted that North Carolina had no meaningful interstate pipeline systems besides Transco. Local gas delivery relied on two large LDCs: Piedmont Natural Gas (a Duke Energy company) and the Public Service Company of North Carolina (PSCNC), with robust intrastate systems but limited upstream options.
What’s changed? Not much, yet. But three projects now in motion all hinge on one key location: Transco’s Station 165 in southern Virginia, where MVP interconnects. Each project builds off that anchor, turning Station 165 into a regional fulcrum for southbound capacity.
Each project is designed to move more gas into or through North Carolina, and the first two are already fully subscribed. Duke and PSCNC back Southgate. Duke is also the anchor shipper on SESE.
Demand for natural gas in North Carolina is growing on multiple fronts. Utility load is climbing, driven by coal retirements and carbon reduction mandates. Duke Energy’s most recent Carbon Plan and Integrated Resource Plan forecasts the retirement of 8,400 MW of coal by 2035, and securing firm gas supply is key to enabling that transition. That’s why Duke has signed precedent agreements on both the Amendment Project and SESE. According to Transco’s application, SESE is needed to “remove pipeline capacity constraints in Zone 4 and 5 and meet growing natural gas fired power generation, commercial, residential, and industrial demand in the southeast United States.”
Population growth is reinforcing that trajectory. As we noted in Crowded Corridors: Population Growth Meets Pipeline Risk, North Carolina added 1.1 million people between 2014 and 2024, one of the fastest increases in the country. More people means more energy demand, particularly in areas already constrained by limited gas infrastructure.
Now, a third layer of demand continues to grow: AI datacenters. As detailed in Ashes to Assets: Coal-to-Gas Gains from EQT to Cumberland, EQT recently announced it will supply gas to two massive datacenter-aligned coal-to-gas conversions in Pennsylvania — Homer City and Shippingport. With MVP now online and EQT as a key stakeholder, similar load-driven redevelopment could materialize along the MVP corridor as energy-intensive infrastructure seeks proximity to firm supply and buildable sites.
The full 2 Bcf/d of mainline capacity created by MVP is subscribed by seven shippers, all with delivery points into Transco near Station 165. EQT holds the majority of this capacity, with firm reservations totaling 1.16 Bcf/d. The remaining capacity is split between utilities and LDCs, each holding between 0.015 to 0.2 Bcf/d in firm transportation. Over the past month, daily nominations from MVP into Transco have averaged around 1.5 Bcf/d. But once the gas enters Transco, its downstream path becomes harder to track.
An analysis of firm transportation contracts on Transco sourced from the MVP interconnect and nearby Station 165 pooling point reveals a structural constraint: less than 0.5 Bcf/d of firm capacity reserved at this location — well below the 2 Bcf/d subscribed on MVP. As we discussed in If MVP is Completed, Where Would the Gas Go?, Transco was initially designed to flow gas produced along the Gulf Coast northward. That dynamic has shifted with rising Appalachian production, which is shown by Transco’s recent contracting trends.
The chart above illustrates the origin zones of Transco’s 2 Bcf/d of contracted North Carolina deliveries. Two-thirds of the capacity comes from Zones 1-4, distributed across 114 different contracts, most of which were inked in the early to mid-1990s. The remaining third is split between just five contracts with receipts within Zone 5 and to the north in Zone 6. These contracts are significantly larger and newer, beginning in 2015 on average, further demonstrating the northward shift in supply location. Looking more broadly at all Zone 5 deliveries, the percentage of capacity coming from Zones 5 and 6 increases from two-thirds to nearly half of all receipt quantities.
More than half of the 2 BCF/d of delivery volumes into North Carolina are on evergreen contracts, primarily supplied from the south. All of the contracts expiring in the next five years also originate in southern zones, indicating potential opportunity for additional MVP gas as demand grows.
Still, constrained receipt capacity on Transco remains a limiting factor. Even as supply from MVP becomes available, downstream constraints will continue to determine how much of that gas can actually reach North Carolina markets.
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