EQT Midstream Partners LP (EQM) has agreed to acquire EQT Corp.'s northern West Virginia Marcellus Shale gathering system and an interest in an unnamed subsidiary for more than $1 billion.
EQM said the acquisition is expected to immediately impact its distributable cash flow per unit. It would pay EQT, its general partner, $997.5 million in cash and $52.5 million in common and general partner units.
The gathering system was designed to gather gas production in the wet and dry gas regions of the Marcellus Shale. It includes 70 miles of gathering pipeline and nine compressor units with a combined 25,000 hp in addition to a 30-mile high-pressure header pipeline that moves wet gas to MarkWest Energy Partners LP's Mobley processing facility in Smithfield, WV.
EQM said it plans to invest $370 million for expansion projects over the next several years. The partnership plans to install 100 miles of additional gathering pipeline and five compressor stations with 23,700 hp.
EQT currently holds 76,000 net acres in northern West Virginia surrounding the system. EQM last May paid EQT $1.18 billion to acquire the Jupiter gathering system in southwest Pennsylvania (see Shale Daily, May 1, 2014). Last month, EQT said it would form a second master limited partnership for EQM, with an initial public offering expected sometime this year, which would own EQT's 2% general partner interest and limited partner units in EQM (see Shale Daily, Feb. 5).