EQT Corporation announces $3.5B joint venture with BXCI

EQT Corporation (EQT) announced that it has entered into a definitive agreement with funds managed by Blackstone Credit & Insurance, or BXCI, to form a new midstream joint venture, or JV, consisting of EQT’s ownership interest in high quality contracted infrastructure assets: 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 $3.5B of cash consideration in exchange for a non-controlling common equity interest in the JV. The investment implies a total JV valuation of approximately $8.8B, 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, or 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 $9B of net debt. EQT has posted a presentation to its investor relations website with more details on the transaction. The transaction is subject to customary closing adjustments, required regulatory approvals and clearances, and is expected to close in the fourth quarter of 2024.