EQT in JV with Blackstone Credit

EQT Corp. has entered into a definitive agreement with funds managed by Blackstone Credit & Insurance (BXCI), to form a new midstream joint venture (consisting of EQT’s ownership interest in Mountain Valley Pipeline, LLC – Series A, FERC regulated transmission and storage assets, and the Hammerhead Pipeline.

Under the terms of the agreement BXCI will provide EQT $3.5 billion of cash consideration in exchange for a non-controlling common equity interest in the JV. The investment implies a total JV valuation of approximately $8.8 billion, or 12x EBITDA. The JV provides EQT with a large-scale equity capital solution at an accretive cost of capital. Additionally, EQT will retain the rights to growth projects associated with the assets contributed to the JV, including the planned Mountain Valley Pipeline (MVP) expansion and the MVP Southgate project.

EQT plans to use proceeds from this transaction to pay down its term loan and revolving credit facility and redeem and tender for senior notes. Pro-forma for this transaction, along with the recent announcement of the divesture of its remaining non-operated assets in northeast Pennsylvania, EQT expects to exit 2024 with approximately $9 billion of net debt.

EQT has posted a presentation to its investor relations website with more details on the transaction.

“This transaction underscores the ultra-high-quality nature of EQT’s regulated midstream assets, which service one of the strongest power demand growth regions in the United States underpinned by long-term contracts with the region’s leading utilities,” said EQT President and CEO Toby Z. Rice. “Importantly, through this joint venture EQT preserves the benefits of the Equitrans acquisition by retaining the long-term value from synergy capture and growth projects. We look forward to working with Blackstone to optimize the value of these assets and together explore strategic opportunities across its leading portfolio of energy, power and digital infrastructure in the years ahead.”