EQT’s days as the largest gas producer in the U.S. may be nearing a close (see the new blog “Finally”), but the company is still making important moves in the long-term gas market. EQT announced January 11 that they entered into an informal tolling agreement to provide 65 MMcf/d of feedgas to the proposed Texas LNG facility in Brownsville. The parties announced that it will be a 15-year deal, but details are still subject to negotiation. Texas LNG has not yet reached FID, but the owners intend to start operations in 2028. If the project comes to fruition, it will help EQT gain exposure to the global market. However, the company is a pure play Appalachian producer and pipeline links from Appalachia to the Gulf Coast are constrained in most months.
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Almost Heaven - EQT Acquisitions Boost Its Role in West Virginia Gas, NGL Markets
It’s hard to think of a $5.2 billion acquisition as a “bolt-on,” but that’s what EQT Corp. — the U.S.’s #1 natural gas producer — is calling its recently announced purchase of Tug Hill’s gas production assets and XcL Midstream’s pipeline and processing assets in northern West Virginia. The deal, which represents the largest acquisition in the Marcellus/Utica Shale in five years, will not only give EQT even more scale in the nation’s leading gas-and-NGLs production region, it also will lower EQT’s breakeven gas price and its emissions intensity. Oh, and with the deal, EQT is doubling its share-repurchase authorization and increasing its year-end-2023 debt-reduction goal by 60%. In today’s RBN blog, we examine and assess these and other aspects of the agreement.
