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EQT’s New Midstream Company: 3rd-Largest Natural Gas Gatherer in the US

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New Midstream Company Profile

As we discussed in the preceding parts of this series, the new midstream company formed after EQT Corporation (EQT) separates its midstream business should result in the third-largest natural gas gatherer in the United States.

EQT expects its midstream cash flows to double over the next three years, with $350 million expected in 2018. Around 60% of the new midstream company’s revenues are expected to come from long-term “firm reservation” charges, while 85% of these revenues are expected to come from investment-grade counterparties including EQT (EQT), Antero Resources (AR), and Gulfport Energy (GPOR).

This separation shouldn’t affect existing contracts between EQT and EQT Midstream Partners (EQM).

In its 4Q17 earnings conference, EQT management stated the following: “Our midstream business has a solid balance of long FERC regulated pipelines and the network of gathering assets, sitting at [the] top [of] the lowest cost natural gas reserves in the US.”

Notably, EQT’s core operations are centered in the Marcellus and Utica shale.

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