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$3.5 Billion Deal: EQT and Blackstone Partner on Major Natural Gas Infrastructure and Why This Matters
11/27/2024
What’s next for U.S. energy pipelines? EQT Corp. and Blackstone Credit just announced a significant partnership. Blackstone is investing $3.5 billion in EQT’s natural gas pipelines and storage assets, including the Mountain Valley Pipeline (MVP). The deal values the joint venture at $8.8 billion, highlighting the growing value of U.S. energy infrastructure.
The Key Details
Blackstone is taking a non-controlling stake in critical EQT pipelines, like MVP and the Hammerhead Pipeline. The MVP can move 1.6 billion cubic feet of natural gas daily and connects Pennsylvania and West Virginia production to major markets.
EQT is retaining the rights to expand these projects, including the MVP Southgate extension, which will boost capacity and access to growing demand centers. The joint venture's valuation is based on a 12x EBITDA multiple, reflecting confidence in the long-term revenue potential of these assets.
EQT’s Financial Move
EQT plans to use the $3.5 billion proceeds to slash its debt. The company will pay down its term loans, revolving credit facilities, and senior notes. By the end of 2024, EQT expects to cut its net debt to about $9 billion, beating its original target ahead of schedule.
“This deal strengthens our finances and keeps us positioned for future growth,” said EQT CEO Toby Z. Rice. The company has already raised $5.25 billion from asset sales this year, exceeding its $3–5 billion goal in divestitures.
Blackstone’s Big Bet
For Blackstone, this deal involves betting on stable, long-term investments in natural gas infrastructure. Pipelines and storage assets are critical for delivering reliable energy as demand grows.
“This partnership supports EQT and ensures these assets are optimized for future growth,” said Robert Horn, Blackstone’s Global Head of Infrastructure.
Why It Matters
Natural gas pipelines like MVP are essential for growing U.S. and global energy needs. EQT’s assets serve power-hungry regions and are backed by long-term contracts with leading utilities.
The $3.5 billion investment reflects a broader trend: Major investors like Blackstone see pipelines and midstream assets as reliable and profitable over the long haul.
- Mountain Valley Pipeline: Delivers 1.6 billion cubic feet per day of natural gas.
- Valuation: Joint venture valued at $8.8 billion, or 12x EBITDA.
- Debt Reduction: EQT is on track to end 2024 with $9 billion in net debt, down from prior highs.
What’s Next?
Pending regulatory approvals, the deal is expected to close by the end of Q4 2024. EQT’s advisors include RBC Capital Markets and Kirkland & Ellis LLP. Citi and Milbank LLP represent Blackstone.
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