Blackstone to acquire stake in EQT Corp

Private-equity firm Blackstone is in talks to acquire minority stakes in an interstate natural gas pipeline owned by EQT Corp for $3.5 billion, a deal that would help EQT to cut its debt down accumulated from its acquisition of Equitrans Midstream earlier this year. EQT announced in July that it would sell stakes as part of plans to reduce its debt.

Blackstone is planning to make the investment through its credit and insurance division according to an anonymous source familiar with the talks. If things don’t fall apart with talks, the deal could be signed very soon.

The transaction would help Blackstone generate steady income to be used in various investment strategies while also giving it exposure into assets in the natural gas midstream sector, including the controversial 300-mile Moountain Valley Pipeline (MVP), running from West Virginia to Virginia. MVP entered service in June after a legal battle that lasted several years over its construction. EQT holds stake in 940 miles of interstate pipelines with a total capacity of 4.4 billion cubic feet per day of natural gas.

In July, EQT said its pipeline portfolio generated nearly $700 million of adjusted EBITDA. The transaction with Equitrans helped to transition the company from just being an E&P company to a fully integrated natural gas provider, though the deal saddled EQT with debt amounting to nearly $14 billion. When the company announced its plans to sell minority stakes in July, it said that it planned to cut its debt load by $5 billion through cash generated from operations and asset sales. EQT has already agreed to divest assets worth $1.1 billion to Equinor.