EQT Corp. said Tuesday it has finally completed the complex spinoff of its midstream business into a separate publicly traded company.
The separation of the upstream and midstream businesses took effect on Monday. Shares of the newly formed company, Equitrans Midstream Corp., have begun trading on the New York Stock Exchange under the ticker symbol “ETRN.”
EQT’s announcement marks the conclusion of an elaborate plan to simplify its corporate structure that got underway earlier this year and included myriad regulatory approvals and several separate transactions.
Equitrans is now one of the nation’s largest natural gas gatherers and transmission pipeline operators. The new company essentially consists of EQT Midstream Partners LP (EQM), the former Rice Midstream Partners LP, which was merged with EQM in July, and the midstream assets EQT had retained. Equitrans has substantial ownership interests in EQM and EQGP Holdings LP.
Equitrans CEO Thomas Karam said the company’s goal is “to achieve the scale and scope of a premier, top-tier midstream company.” The new company, management said, would focus on leveraging existing pipeline and storage infrastructure systems by developing organic growth projects that will expand its footprint across the Appalachian Basin with delivery to major demand markets. Equitrans also takes over the beleaguered Mountain Valley Pipeline project, which has faced legal and regulatory delays and sharp cost increases on its path to completion.
The upstream and midstream split had its roots last year after EQT, now the nation’s largest natural gas producer, acquired Rice Energy Inc. for $8 billion. That deal followed several others that ballooned the exploration and production company’s position and created a need to simplify the corporate structure. Investors also had pushed for the split to sap more value from the company’s various parts.
The separation took effect by distributing about 80% of the outstanding common stock of Equitrans. EQT shareholders retained their EQT shares and received 0.80 Equitrans share for each EQT share held as of Nov. 1. EQT retained 19.9% of Equitrans.
With the split complete, former CFO Robert J. McNally officially takes over as CEO. He was named successor to Steven Schlotterbeck, who left the company earlier this year over a dispute with the board. McNally was appointed CEO in August, along with Karam, who was named to lead Equitrans at the same time.