EQT, Partnerships Plan More than $4 Billion in 2018 Capex, Boost Roles in Marcellus Shale

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Researched by Industrial Info Resources (Sugar Land, Texas)--EQT Corporation (NYSE:EQT) is now one of the top U.S. producers of natural gas, following a major acquisition last month, and the company expects to see its production and sales volumes grow substantially over the next two years. The company put its 2018 capital-expenditure (capex) forecast at $2.4 billion; combined with EQT Midstream Partners LP (NYSE:EQM) and Rice Midstream Partners LP (NYSE:RMP), both of which are master limited partnerships controlled by EQT Corporation, growth capex is expected to be as high as $4 billion. Industrial Info is tracking more than $781 million in active projects involving EQT, almost all of which are nearing or under construction.

EQT acquired Rice Energy Incorporated in early November for $6.7 billion, in an effort to expand its already burgeoning natural gas business. Much of Rice's assets are in Pennsylvania, one of several gas-rich states that are moving the U.S. toward the top global spot in natural gas exports. The Marcellus Shale, in particular, has been a top target for EQT's project investments.

Among EQT Midstream's own major projects in Pennsylvania is the Equitrans Expansion Project, which is designed to transport up to 600 million standard cubic feet per day of natural gas from the Marcellus to the northeastern, Mid-Atlantic and southeastern U.S., via interconnects with existing pipelines. The project includes the construction of the $70 million Red Hook Compressor Station in Waynesburg, following a $19 million dismantlement of the existing Pratt Station, to support the $8 million H-316 and $12 million H-318 pipeline segments that will run a total of seven miles. For more information, see Industrial Info's project reports on the Red Hook station and dismantlement, and the H-316 and H-318 lines.

"EQT is a decade behind in fracking technology used by industry leaders in Marcellus/Utica," said Dallas Salazar, CEO of energy consulting firm Atlas Consulting, in an interview with Reuters. "EQT needs a lot - and Rice offers a lot of what it needs."

EQT Midstream also is at work on the southeastern portion of the Mountain Valley Pipeline, a 303-mile natural gas pipeline system that runs from northwestern West Virginia to southern Virginia. It includes two major segments: the $150 million line from Wetzel County to Braxton County in West Virginia, and the $250 million line from Braxton County to Pittsylvania County, Virginia. It is expected to have a capacity of up to 2 billion cubic feet per day and connect with Transcontinental Gas Pipe Line Company LLC's mainline system in Virginia. For more information, see Industrial Info's project reports on the Wetzel-Braxton and Braxton-Pittsylvania segments.

The project took a step forward week when Virginia's State Water Control Board approved its water permits, despite protest from environmental and land-rights activists, according to The Washington Post. The line has a larger presence in West Virginia, where EQT is planning three compressor stations: the $120 million Bradshaw station in New Martinsville, the $75 million Harris station in Sutton and the $75 million Stallworth station in Lewisburg. Each will use Solar Titan turbine-driven compressor packages. For more information, see Industrial Info's project reports on the Bradshaw, Harris and Stallworth stations.

The Mountain Valley Pipeline will be constructed and owned by Mountain Valley Pipeline LLC, which is a joint venture of EQT Midstream; NextEra US Gas Assets LLC, a subsidiary of NextEra Energy Incorporated (NYSE:NEE) (Juno Beach, Florida); Con Edison Transmission Incorporated, a subsidiary of Consolidated Edison Incorporated (NYSE:ED) (New York City, New York); WGL Midstream, a subsidiary of WGL Holdings Incorporated (NYSE:WGL) (Washington, D.C.); and RGC Midstream LLC, a subsidiary of RGC Resources (NASDAQ:RGCO) (Roanoke, Virginia). EQT Midstream Partners will operate the pipeline.

EQT expects production sales volumes to total between 1.52 trillion and 1.56 trillion cubic feet equivalent in 2018, and to increase 15% in 2019.

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