EQT Midstream Partners LP, a unit of Appalachian producer EQT Corp., is preparing to launch a public offering as a master limited partnership (MLP). The initial public offering (IPO) is expected to raise up to $250 million.

The IPO comes just days after another unconventional producer, Quicksilver Resources Inc., said its Barnett Shale subsidiary, Quicksilver Production Partners LP, planned to launch as a separate company (see Shale Daily, Feb. 13).

EQT Midstream, which would be listed as EQM on the New York Stock Exchange, now has more than 11,400 miles of gathering and transmission pipeline and 63 Bcf of storage capacity. It operates in 22 counties in Pennsylvania and West Virginia. The unit delivered net income to EQT of $22 million through the first nine months of 2011, compared with $12.8 million in the same nine months of 2010.

EQT, based in Pittsburgh, would be part owner of the EQT MLP and its management team would oversee operations. The producer has worked in the Appalachian Basin for more than 120 years. It owns 3.5 million acres, more than 14,000 gross productive wells and a total of 5.2 Tcf of natural gas reserves. As a stand-alone entity, the MLP plans to continue to operate on a long-term, fixed fee contract model. It also may pursue contracts to deliver gas to other end-users.

Timing for the IPO was not disclosed. Once EQT Midstream completes the offering, it said it plans to acquire more transmission, storage and gathering assets from its parent corporation.

Citigroup is to act as lead book-running manager; and Citigroup and Barclays Capital would act as co-structuring agents in the transaction.