EQT Midstream Partners will acquire EQT Corporation subsidiary Sunrise Pipeline

Private equity firm EQT Midstream Partners will acquire EQT Corporation subsidiary Sunrise Pipeline the LLC. The company has forty miles of a pipeline as well as other assets in West Virginia as well as Pensylvania. The deal will close at around 507.5 million US Dollars in cash as well as 32.5 million Dollars in common moreover, inclusive partner units, the companies said recently.
Terms of the contract include that the corporation will also offer 110 millions US Dollars to the EQT Corporation once a fresh compressor station expansion turn out to be effective.

The biggest asset of Sunrise is 41.5 miles of pipeline that parallels and interconnects with the portion of the partnership’s transmission and storage system from Wetzel County, W.Va., to Greene County, Pa. Sunrise is also the owner of the Jefferson compressor station in Greene County and an interconnect with the Texas Eastern pipeline that is in the same area.

Focusing on natural gas production, EQT Corporation is an integrated energy company in the area of Appalachian. EQT Midstream Partners, of which EQT is the allover partner and the majority equity owner, is a limited partnership orientated by growth, that owns, operates buy and establishes midstream assets in the Appalachian Basin.

Sunrise’s assets are run by the partnership, this forms part of its transmission and storage system under a lease agreement with EQT Corp. As soon as the Sunrise sale is completed, the lease agreement will seize to exist.

In a statement announcing the deal, the companies said that the future cash flow of sunrise is expected to rise in 2014 and even more so in 2015.

At the moment, Sunrise is expanding its Jefferson compressor station in order to assure that is able to offer around 550 BBtus every day of other capacity. The EQT’s partnership would invest around 30 million US Dollars in to the expansion that is going to commence in 1, Sept. 2014. This will produce yearly revenues of around 84 million Dollars, the companies said.

According to the announcement, EQT subsidiary EQT Energy has a decade deal providing about 295 BBtus each day of firm capacity and resulting in 26.9 million US Dollars of yearly firm reservation revenue.

A 20 Year agreement has also been made by Sunrise and an undisclosed third party. The agreement is set to start April 1 and result in 13 million US Dollars of firm reservation revenue and up to 1 million US Dollars of company usage revenue each year, if fully used.

Additionally, the partnership announced a 40 cent cash distribution for each unit for the second quarter of 2013 — an 8 percent increase over its first quarter figure. The partnership said its estimated 23.4 million US Dollar adjusted earnings before interest, taxes, depreciation and amortization in the second quarter are in line with its previously issued guidance of adjusted EBITDA in the range of 22 million US dollars and 24 million US Dollars.