A federal appeals court in Richmond on Monday threw out two key permits for the Atlantic Coast pipeline, a ruling environmental groups said should halt construction on the 600-mile natural gas pipeline.

But project developers insisted the ruling should not result in a lengthy delay.

The pipeline is slated to start in West Virginia and run through Virginia and North Carolina.

A three-judge panel of the 4th U.S. Circuit Court of Appeals said a U.S. Fish and Wildlife Service permit was “arbitrary and capricious” because it provided no specific limits for the allowable impact on five threatened or endangered species. The ruling elaborates on a decision first issued in May.

The 4th Circuit also vacated a right-of-way permit from the U.S. National Park Service because it allows the pipeline to pass underneath the Blue Ridge Parkway without explaining how the project would not be inconsistent with the scenic parkway, which is part of the National Park System.

“Today’s decision means Atlantic has to go back to the drawing board,” said D.J. Gerken, a senior attorney with the Southern Environmental Law Center, which argued the case on behalf of the Sierra Club, Defenders of Wildlife and the Virginia Wilderness Committee.

“Their plan to cut through two national forests and the Blue Ridge Parkway is no longer viable,” Mr. Gerken said.

But officials with Dominion Energy, the project’s lead developer, said it will work with the agencies to resolve the court’s concerns and “reinstate our permits as soon as possible.”

“We believe the court’s concerns can be promptly addressed through additional review by the agencies without causing unnecessary delay to the project,” Dominion said in a written statement.

The court’s ruling expanded on its May 15 order on the “Incidental Take Statement,” which typically authorizes a project to harm or kill no more than a limited number of threatened or endangered species. In its May ruling, the 4th Circuit agreed with environmental groups that said the Fish and Wildlife Service failed to set clear limits on the project’s impact.

Dominion said it has already provided the agency with information needed to issue a revised Incidental Take Statement to comply with the court’s ruling.

As for the National Park Service permit, Dominion said it believes the “extensive public record and mitigation requirements already in place provide ample support for the agency to promptly reissue the permit.”

The agencies did not immediately respond to requests for comment.

In its ruling, the 4th Circuit said the Blue Ridge Parkway, which links Virginia’s Shenandoah National Park to North Carolina’s Great Smoky Mountains National Park, serves as a recreational and scenic site. The pipeline would pass underneath the parkway, but the proposed route would require removing all of the trees from a portion of nearby forest, leaving a clearing that would be visible from at least one key observation point along the parkway, “thus significantly decreasing the park’s scenic value.”

The ruling, written by Chief Judge Roger Gregory, said the National Park Service’s decision to grant the pipeline a right-of-way permit was “arbitrary and capricious for failing to explain the pipeline’s consistency with the purposes of the Blue Ridge Parkway and the National Park System.”

In a footnote, the 4th Circuit said the Federal Energy Commission’s authorization for the pipeline to begin construction is conditioned on valid permits from both the Fish and Wildlife Service and the National Park Service. “Absent such authorizations, ACP, should it continue to proceed with construction, would violate FERC’S certificate of public convenience and necessity,” reads the footnote.

Monday’s ruling was the second setback in recent days for a natural gas pipeline planned for the region. Last week, federal regulators ordered a halt to construction of a 300-mile pipeline on a swath of national forest following a ruling by the 4th Circuit.

In a letter Friday to Mountain Valley Pipeline officials, the Federal Energy Commission said the company failed to obtain rights-of-way or temporary use permits needed for the pipeline to cross federally owned lands since the court canceled permits the previous week. The letter said construction “must cease immediately” on the pipeline, which would run through Virginia and West Virginia.

“There is no right way to build these dirty, dangerous fossil fuel projects, and people in Virginia and across the country will continue to come together to fight them until they are permanently halted,” said Sierra Club Executive Director Michael Brune.

Developers of the pipelines say they will help utilities transition away from coal, create jobs and boost the economy.

A federal appeals court in Richmond has thrown out two key permits for the Atlantic Coast pipeline.

Environmental groups said the ruling Monday by a three-judge panel of the 4th U.S. Circuit Court of Appeals means construction should be halted on the 600-mile natural gas pipeline.

The judges said a U.S. Fish and Wildlife Service permit was “arbitrary and capricious” because it provided no specific limits for the allowable impact on five threatened or endangered species.

They also vacated a right-of-way permit from the U.S. National Park Service because it allows the pipeline to pass underneath the Blue Ridge Parkway without explaining how the project would not be inconsistent with the scenic parkway.

Dominion Energy said it will work with the agencies to resolve the court’s concerns and “reinstate our permits as soon as possible.”