EQT Corporation EQT has announced a $3.5 billion midstream joint venture with funds managed by Blackstone Credit & Insurance (“BXCI”). The partnership involves EQT’s ownership interests in several high-quality, contracted midstream assets, including Mountain Valley Pipeline, LLC (Series A), FERC-regulated transmission and storage assets and the Hammerhead Pipeline.

Under the agreement, BXCI will acquire a non-controlling common equity stake in the joint venture (JV). EQT will retain rights to future growth projects, including the Mountain Valley Pipeline expansion and the MVP Southgate project, thereby maintaining its strategic growth trajectory.

Debt Reduction in Focus for EQT

EQT plans to deploy the $3.5 billion cash proceeds to reduce its debt. The company aims to pay down its term loan and revolving credit facility as well as redeem senior notes. Coupled with the sale of its non-operated assets in Northeast Pennsylvania, EQT projects to exit 2024 with approximately $9 billion in net debt, strengthening its financial position significantly.

EQT president and CEO Toby Z. Rice emphasized the transaction’s strategic value, highlighting the JV's ability to preserve long-term benefits from the Equitrans acquisition while partnering with Blackstone to enhance asset optimization.

Strategic Benefits for EQT and Blackstone

EQT’s CFO, Jeremy Knop, praised Blackstone's capital solutions expertise, stating that the deal delivers an equity financing solution at a cost lower than EQT’s equity capital. Knop noted that EQT has exceeded its $3-$5 billion asset sale target ahead of schedule, achieving more than $5.25 billion in announced divestitures.

BXCI leaders echoed the strategic significance of the partnership. Robert Horn, global head of Infrastructure & Asset-Based Credit at BXCI, and Rick Campbell, managing director at BXCI, cited strong tailwinds in the energy sector and Blackstone's ability to craft innovative capital solutions as critical to the JV's value.

The deal is subject to customary closing conditions, regulatory approvals and clearances. EQT expects the transaction to close in the fourth quarter of 2024. The Hammerhead Pipeline, a key asset in the JV, is a 1.6 billion cubic feet per day pipeline connecting natural gas from Pennsylvania and West Virginia to multiple transmission systems.

This strategic move highlights EQT’s commitment to financial discipline and growth while aligning with Blackstone’s focus on scalable infrastructure investments.

EQT’s Zacks Rank & Key Picks

Currently, EQT carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector may look at some better-ranked stocks like Smart Sand, Inc. SND, FuelCell Energy FCEL and Nine Energy Service NINE, each presently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Smart Sand is a low-cost producer of high-quality Northern White frac sand, an ideal proppant for hydraulic fracturing and various industrial applications. The company provides proppant and other logistics services for several companies in the oil and gas industry. With sustained oil and gas market demand, SND is expected to see growing demand for its services, reflecting a positive outlook.

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, thereby 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.

Nine Energy Service provides onshore completion and production services for unconventional oil and gas resource development. The company operates across key prolific basins in the United States, including the Permian, Eagle Ford, MidCon, Barnett, Bakken, Rockies, Marcellus and Utica, as well as throughout Canada. With a sustained demand for oil and gas in the future, the demand for NINE’s services is anticipated to increase, which should position it for growth in the long run.

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