Mountain Valley pipeline has taken a significant step towards restarting construction as West Virginia environmental regulators granted a new water permit, according to court documents filed by the partnership overseeing the project, Reuters reported.

Mountain Valley informed the U.S. Court of Appeals for the Fourth Circuit that West Virginia issued a renewed Section 401 water quality certification for the pipeline, which stretches from West Virginia to Virginia, on June 8.

Despite facing legal challenges from environmental and local groups opposed to the project, the Fourth Circuit, which has previously invalidated multiple federal and state permits for the pipeline, continues to hear ongoing lawsuits.

The $6.6 billion Mountain Valley pipeline is crucial for accessing additional gas reserves in Appalachia, the largest shale gas basin in the United States.

Analysts at Height Capital Markets, an investment banking and research firm, stated that the recent approval of the U.S. Fiscal Responsibility Act and the issuance of the West Virginia permit "significantly raises the probability of a 2023 placed-in-service date" for the project.

In the court filing, Mountain Valley expressed that it anticipates the U.S. Army Corps of Engineers to grant a Section 404 water permit by June 24, as required under the Fiscal Responsibility Act.

"Once (the Army Corps) fulfills this requirement, Mountain Valley expects to resume construction," stated Mountain Valley in the court filing.

Mountain Valley, currently the only major gas pipeline under construction in Appalachia, is among several pipeline projects in the U.S. that have experienced delays due to regulatory and legal battles with environmental and local groups.

Equitrans Midstream Corp (ETRN.N), the lead partner in the project, initially estimated that the 303-mile (488-km) pipeline with a capacity of 2 billion cubic feet per day would cost approximately $3.5 billion and become operational by late 2018 when construction began in February 2018.