EQM Midstream Partners, LP owns, operates, acquires, and develops midstream assets in the Appalachian Basin. EQGP Services, LLC serves as the general partner of the company.
The company provides midstream services to its customers in Pennsylvania, West Virginia and Ohio through its three primary assets, including the gathering system, which delivers natural gas from wells and other receipt points to transmission pipelines; the transmission and storage system, which delivers natural gas to local...
EQM Midstream Partners, LP owns, operates, acquires, and develops midstream assets in the Appalachian Basin. EQGP Services, LLC serves as the general partner of the company.
The company provides midstream services to its customers in Pennsylvania, West Virginia and Ohio through its three primary assets, including the gathering system, which delivers natural gas from wells and other receipt points to transmission pipelines; the transmission and storage system, which delivers natural gas to local demand users and long-haul interstate pipelines for access to demand markets; and the water service system, which consists of water pipelines, impoundment facilities, pumping stations, take point facilities and measurement facilities that support well completion activities and collects flowback and produced water for recycling or disposal.
As of December 31, 2019, the company provided a majority of its natural gas gathering, transmission and storage services under long-term, firm contracts that include fixed monthly reservation fees. Its operations focus primarily in southwestern Pennsylvania, northern West Virginia and southeastern Ohio, which are strategic locations in the natural gas shale plays known as the Marcellus and Utica Shales.
Segments
The company operates through Gathering, Transmission and Water segments. The three business segments correspond to the company’s three primary assets, such as the gathering system, transmission and storage system and water system.
Gathering Assets
As of December 31, 2019, the company’s gathering system included approximately 990 miles of high-pressure gathering lines and 130 compressor units with compression of approximately 445,000 horsepower and multiple interconnect points with the company’s transmission and storage system and other interstate pipelines.
The company’s gathering system also included approximately 920 miles of the U.S. Federal Energy Regulatory Commission (FERC)-regulated, low-pressure gathering lines. During 2019, the company divested certain of its FERC-regulated low-pressure gathering pipelines associated with its Copley gathering system located in West Virginia.
Transmission and Storage Assets
As of December 31, 2019, the company’s transmission and storage system included approximately 950 miles of FERC-regulated, interstate pipeline that have interconnect points to seven interstate pipelines and multiple local distribution companies (LDCs). The transmission and storage system is supported by 39 compressor units, with total throughput capacity of approximately 4.4 billion cubic feet (Bcf) per day and compression of approximately 135,000 horsepower, and 18 associated natural gas storage reservoirs, which have a peak withdrawal capacity of approximately 900 million cubic feet (MMcf) per day and a working gas capacity of approximately 43 Bcf.
Water Assets
As of December 31, 2019, the company’s water system included approximately 180 miles of pipeline that deliver fresh water from the Monongahela River, the Ohio River, local reservoirs and various regional waterways. In addition, the water system assets included 28 fresh water impoundment facilities, which support fresh water transportation throughout the systems, and take point facilities and measurement facilities, which support well completion activities and collect and recycle or dispose flowback and produced water.
Projects
Mountain Valley Pipeline (MVP)
The MVP Joint Venture is a joint venture with the company and affiliates of each of NextEra Energy, Inc.; Consolidated Edison, Inc.; AltaGas Ltd.; and RGC Resources, Inc. that is constructing the MVP. As of December 31, 2019, the company owned a 45.5% interest in the MVP Joint Venture and would operate the MVP. The MVP is an estimated 300 mile, 42-inch diameter natural gas interstate pipeline with a targeted capacity of 2.0 Bcf per day that would span from its existing transmission and storage system in Wetzel County, West Virginia to Pittsylvania County, Virginia, providing access to the southeast demand markets. The MVP Joint Venture has secured a total of 2.0 Bcf per day of firm capacity commitments at 20-year terms and is in negotiation with additional shippers that have expressed interest in the MVP project. The MVP Joint Venture is evaluating an expansion opportunity that could add approximately 0.5 Bcf per day of capacity through the installation of incremental compression and is also evaluating other pipeline extension projects.
Wellhead Gathering Expansion and Hammerhead Project
In 2020, the company intends to invest approximately $500 million in gathering expansion projects, including the continued gathering infrastructure expansion of core development areas in the Marcellus and Utica Shales, in southwestern Pennsylvania, eastern Ohio, and northern West Virginia for the company, Range Resources Corporation and other producers, and the Hammerhead project, a 1.6 Bcf per day gathering header pipeline that is designed to connect natural gas produced in Pennsylvania and West Virginia to the MVP and is supported by a 20-year term, 1.2 Bcf per day firm capacity commitment from EQT Corporation and its subsidiaries (EQT). The Hammerhead project is expected to become operational in the second quarter of 2020 and would provide interruptible service until the MVP is placed in-service, at which time the firm capacity commitment would begin. The Hammerhead project has a targeted full in-service date of late 2020.
MVP Southgate Project
In April 2018, the MVP Joint Venture announced the MVP Southgate project, a proposed 70-mile interstate pipeline that would extend from the MVP at Pittsylvania County, Virginia to new delivery points in Rockingham and Alamance counties, North Carolina. The MVP Southgate project is backed by a 300 MMcf per day firm capacity commitment from Dominion Energy North Carolina. As designed, the MVP Southgate project has expansion capabilities that could provide approximately 900 MMcf per day of total capacity. The company would operate the MVP Southgate pipeline and, as of December 31, 2019, owned a 47.2% interest in the MVP Southgate project.
The MVP Joint Venture submitted the MVP Southgate certificate application to the FERC in November 2018. Subject to approval by the FERC and other regulatory agencies, the MVP Southgate project is expected to be placed in-service in 2021.
Transmission Expansion
In 2020, the company intends to invest approximately $60 million in transmission expansion projects, primarily attributable to the Allegheny Valley Connector, LLC; the Equitrans, L.P. Expansion project (EEP), which is designed to provide north-to-south capacity on the mainline Equitrans, L.P. system for deliveries to the MVP, and power plant projects. The EEP would provide capacity of approximately 600 MMcf per day and offers access to various markets through interconnects with Texas Eastern Transmission, Dominion Transmission, and Columbia Gas Transmission. EEP would also provide delivery into the MVP and once the MVP is placed in service, firm transportation agreements for 550 MMcf per day of capacity would commence under 20-year terms. EEP has a targeted full in-service date of late 2020.
Water Expansion
During the twelve months ended December 31, 2019, the company invested approximately $37 million in the expansion of its fresh water delivery infrastructure. In 2020, the company expects to invest approximately $20 million in the expansion of its fresh water delivery infrastructure in Pennsylvania and Ohio.
Strategy
The company’s principal strategy is to achieve the scale and scope of a top-tier midstream company by leveraging its existing assets, executing on its growth projects, and where appropriate, seeking and executing on strategically-aligned acquisition and joint venture opportunities. As part of its approach to organic growth, the company focuses on building and completing its key transmission and gathering growth projects, majority of which are supported by contracts with firm capacity commitments. Additionally, the company is targeting growth from volumetric gathering and transmission opportunities and from its water services business, which is complementary to its gathering business.
Markets and Customers
The company’s two major customers are EQT and its affiliates and PNG Companies LLC and its affiliates. EQT, a major natural gas producer in the United States, accounted for approximately 69% of the company’s total revenues for the year ended December 31, 2019. For the year ended December 31, 2019, PNG Companies LLC and its affiliates, an LDC, accounted for approximately 7% of its total revenues, all of which was included in Transmission.
Gathering Customers: For the year ended December 31, 2019, EQT accounted for approximately 72% of Gathering's revenues. Subject to certain exceptions and limitations, Gathering has acreage dedications through which the company has the right to elect to gather all natural gas produced from wells under an area covering approximately 244,000 gross acres in Pennsylvania pursuant to agreements with certain affiliates of EQT and other third parties; approximately 344,000 gross acres in Ohio pursuant to agreements with certain affiliates of EQT and other third parties; and approximately 50,000 gross acres in West Virginia. In addition, as of December 31, 2019, Gathering had an acreage dedication of approximately 12,000 gross acres, with a producer option to expand towards approximately 30,000 gross acres, in Pennsylvania, pursuant to which the company has the right to provide a proposal to gather all natural gas provided from wells under that area. In February 2020, EQT and affiliates of EQT and the company entered into the gas gathering and compression agreement, consolidating 14 of the gas gathering agreements between EQT and the company into a single worldwide gas gathering agreement.
Transmission Customers: For the year ended December 31, 2019, EQT accounted for approximately 65% of Transmission's throughput and approximately 56% of Transmission's revenues. Transmission has an acreage dedication from EQT through which the company has the right to elect to transport all gas produced from wells drilled by EQT under an area covering approximately 60,000 acres in Allegheny, Washington and Greene counties in Pennsylvania; and Wetzel, Marion, Taylor, Tyler, Doddridge, Harrison and Lewis counties in West Virginia. For the year ended December 31, 2019, PNG Companies, LLC and its affiliates accounted for approximately 27% of Transmission's revenues. Other customers include LDCs, marketers, producers and commercial and industrial users. The company’s transmission and storage system provides customers with access to adjacent markets in Pennsylvania, West Virginia and Ohio and to the Mid-Atlantic, Northeastern, the Midwestern and Gulf Coast markets through interconnect points with major interstate pipelines.
Water Customers: For the year ended December 31, 2019, EQT accounted for approximately 89% of Water's revenues. The company has the right to provide fluid handling services to certain EQT operated wells until December 22, 2029 (and thereafter such right continues on a month-to-month basis) within the areas of dedication in Washington and Greene counties, Pennsylvania and Belmont County, Ohio, including the delivery of fresh water for well completion operations and the collection and recycling or disposal of flowback and produced water. The company also provides water services to other customers operating in the Marcellus and Utica Shales.
Divestiture
In 2019, Equitrans, L.P., a subsidiary of the company, entered into a purchase and sale agreement with Diversified Gas & Oil Corporation for the sale of its Copley gathering system, including approximately 530 miles of low-pressure gathering pipelines, four compressor stations and related assets.
Regulation
The company’s interstate natural gas transmission and storage operations are regulated by the FERC under the Natural Gas Act of 1938, the Natural Gas Policy Act of 1978, and the Energy Policy Act of 2005.
The company holds certificate Public Convenience and Necessity for the MVP. Its interstate natural gas pipeline system is subject to regulation by Pipeline and Hazardous Materials Safety Administration of the U.S. Department of Transportation.
The company generates materials in the course of its ordinary operations that are regulated as ‘hazardous substances’ under Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) or similar state laws, and as a result, might be jointly and liable under CERCLA, or such laws, for all or part of the costs required to clean up sites at which these hazardous substances have been released into the environment.
The company also generates solid wastes, including hazardous wastes, which are subject to the requirements of Resource Conservation and Recovery Act, and comparable state statutes. The federal Clean Air Act and comparable state laws and regulations restrict the emission of air pollutants from various industrial sources, including the company’s compressor stations, and also impose various monitoring and reporting requirements.
The company is subject to various federal and state laws and regulations, including the federal Occupational Safety and Health Act (OSHA) and comparable state statutes, whose purpose is to protect the health and safety of workers. In addition, the OSHA hazard communication standard, the U.S. Environmental Protection Agency community ‘right-to-know’ regulations and comparable state laws and regulations require that information be maintained concerning hazardous materials used or produced in the company’s operations and that this information be provided to employees, state and local government authorities and citizens.
History
EQM Midstream Partners, LP was incorporated in 2012.
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