EQT Plans to Sell Minority Stakes in Its Pipeline Assets for $3.5B

EQT Corporation EQT, a leading U.S.-based natural gas producer, is reportedly in talks with Blackstone, a major private equity (PE) firm, to sell minority stakes in its interstate natural gas pipelines, per Reuters. The transaction is valued at approximately $3.5 billion. The two companies are currently going through extensive discussions, and if everything falls in place, a deal might be finalized in the upcoming weeks, according to sources.This might ease a considerable amount of the debt burden on EQT due to its acquisition of Equitrans Midstream. The private equity firm has mentioned that it plans to fund the transaction through its credit and insurance wing. Per Reuters, EQT will continue to operate the pipeline after the deal is finalized.The transaction is expected to contribute to a steady stream of earnings for BlackStone, which it can utilize for other investment plans. Pipelines and other energy infrastructure assets are known to provide a reliable stream of income as they often work through long-term contracts. By investing in EQT’s assets, BlackStone will also gain access to the controversial Mountain Valley Pipeline. This pipeline spans over 300 miles, connecting West Virginia to Virginia, and is a crucial part of the U.S. natural gas pipeline network.The Mountain Valley Pipeline has been a controversial asset for a long time. The pipeline faced several setbacks, which caused delays in its construction. After fighting a legal battle over several years, the pipeline finally came into operation in June this year.EQT holds interests in 940 miles of interstate natural gas pipelines. These natural gas pipelines have a combined capacity of approximately 4.4 billion cubic feet per day (bcf/d). EQT also holds a stake in the entity that owns the Mountain Valley Pipeline. Notably, the natural gas producer’s stake in this entity is a crucial asset included in the deal. The acquisition of Equitrans Midstream marked a milestone for EQT, transforming the company from an exploration and production player focused on natural gas to a vertically integrated natural gas seller. However, the acquisition added a significant debt load of about $14 billion for EQT.EQT’s Zacks Rank and Key PicksCurrently, EQTcarries a Zacks Rank #4 (Sell).Some better-ranked stocks in the energy sector are Archrock Inc. AROC, The Williams Companies, Inc. WMB and FuelCell Energy FCEL. Archrock presently sports a Zacks Rank #1 (Strong Buy), while The Williams Companies and FuelCell Energy carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.The Williams Companies, Inc. is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing, and transporting natural gas and natural gas liquids. Boasting a widespread pipeline system of more than 33,000 miles, Williams is one of the largest domestic transporters of natural gas by volume.FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Williams Companies, Inc. (The) (WMB): Free Stock Analysis Report EQT Corporation (EQT): Free Stock Analysis Report FuelCell Energy, Inc. (FCEL): Free Stock Analysis Report Archrock, Inc. (AROC): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks