EQT Midstream Partners to buy West Virginia gathering system for $1.05bn

EQT Midstream Partners has agreed to acquire Northern West Virginia Marcellus gathering system from its parent firm EQT Corporation for $1.05bn.

The company will pay $997.5m in cash and $52.5m in common and general partner units.

Apart from the gathering system, EQT Midstream will acquire a preferred interest in an EQT subsidiary.

The gathering system collects natural gas production in the wet gas and dry gas regions of the Marcellus, particularly in the Saturn, Mercury, Pandora and Pluto development areas, in West Virginia.

The system includes about 70 miles of natural gas gathering pipeline and nine compressor units, a 30-mile, high-pressure wet gas header pipeline that links development areas to the MarkWest Mobley processing facility.

EQT Midstream plans to invest about $370m in the next several years for system expansion projects, including installation of around 100 miles of gathering pipeline and five compressor units.

EQT currently holds about 76,000 net acres in northern West Virginia that surround the acquired gathering system, including 59,000 net undeveloped acres.

As of 31 December 2014, the system serviced 199 Marcellus wells and 20 Upper Devonian wells, with an average daily gathered volume of about 410 MMcf per day.

EQT Midstream Partners owns, operates, acquires, and develops midstream assets in the Appalachian Basin.

The company owns 700 miles and operates a further 200 miles of Federal Energy Regulatory Commission-regulated interstate pipelines. It also owns over 1,500 miles of high- and low-pressure gathering lines.