EQT Corporation announced a definitive agreement with funds managed by Blackstone Credit & Insurance (BXCI) to form a new midstream joint venture (JV). BXCI will provide EQT with $3.5 billion in cash consideration in exchange for a non-controlling common equity interest in the JV. The transaction implies a total JV valuation of approximately $8.8 billion, or 12x EBITDA.
The JV will consist of EQT's ownership interest in high-quality contracted infrastructure assets, including Mountain Valley Pipeline, FERC regulated transmission and storage assets, and the Hammerhead Pipeline. EQT will retain rights to growth projects associated with these assets, such as the planned Mountain Valley Pipeline expansion and the MVP Southgate project. Proceeds from this transaction are earmarked for debt repayment, including term loans, revolving credit facilities, and senior notes.
This joint venture provides EQT with a large-scale equity capital solution at an accretive cost of capital, significantly advancing its deleveraging goals. Pro-forma for this transaction and the recent non-operated asset divestiture, EQT expects to exit 2024 with approximately $9 billion of net debt. The deal underscores the value of EQT's regulated midstream assets and its commitment to debt reduction, exceeding its $3-$5 billion asset sale target ahead of schedule.
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