EQT to sell gas pipeline system for US$ 1.18 billion

EQT Corporation today announced that EQT Midstream Partners, LP has agreed to acquire EQT’s Jupiter natural gas gathering system (Jupiter) for US$ 1.18 billion. EQT will receive US$ 1.12 billion of cash and US$ 59 million of common and general partner units. In addition, the Partnership will fund US$ 182 million of expansion projects related to Jupiter. Two additional announcements include the execution of an agreement to exchange assets with Range Resources Corporation; and EQT share repurchase authorisation.

Jupiter sale

The Jupiter system gathers EQT’s Marcellus production in portions of Greene and Washington Counties, Pennsylvania, and consists of approximately 35 miles of natural gas gathering pipeline and approximately 21 300 HP of compression.

Jupiter has a total of 970 million ft³/d of pipeline capacity and six interconnects with the Partnership’s transmission and storage systems.

The Partnership has agreed to complete several expansion projects related to Jupiter during 2014 and 2015. The 2014 expansions will add approximately 350 ft³/d of compression capacity, with an in-service date anticipated for the fourth quarter 2014. The 2015 expansion will add approximately 200 ft³/d of compression capacity, with an in-service date anticipated for the fourth quarter 2015. In addition, the Partnership plans to install approximately 20 miles of pipeline during this time. In total, the compression and gathering expansion projects have an estimated cost of approximately US$ 182 million.

The Jupiter assets are supported by a gathering agreement with EQT that includes 10-year firm capacity reservation commitments. The contracted capacity is initially 225 ft³/d and will grow to 775 ft³/d by the end of 2015. EQT will also pay a per-unit fee for volume above the contracted capacity; and expects full-year 2014 firm reservation charges and usage fees to be approximately US$ 130 million. Operating expenses, excluding depreciation and amortisation, are forecast to be approximately US$ 20 million in 2014.

EQT currently holds approximately 48 000 net acres surrounding Jupiter, including approximately 31 000 undeveloped net acres. As of 31 March, 2014, a total of 206 Marcellus and 9 Upper Devonian wells were drilled in the Jupiter service area. Jupiter’s average daily gathered volume for the first quarter 2014 was approximately 595 ft³/d.

Adapted from press release by Hannah Priestley-Eaton

Read the article online at: https://www.worldpipelines.com/business-news/02052014/eqt_to_sell_gas_pipeline_system_for_us_118_billion/