EQT Corp. to sell gas distribution business to Peoples Gas - WBOY.com: Clarksburg, Morgantown: News, Sports, Weather

EQT Corp. to sell gas distribution business to Peoples Gas

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EQT Corp. announced Dec. 20 that it has entered into a definitive agreement for the transfer of its natural gas distribution business, Equitable Gas Co. LLC, to Peoples Natural Gas.

Equitable Gas Co. delivers gas to customers in Kentucky, Pennsylvania and West Virginia. It is the third largest natural gas distribution company in West Virginia, with about 13,000 customers in 2011.

Peoples Natural Gas does not have a customer base in West Virginia.

As part of the transaction, EQT expects to receive about $720 million in cash.

It also will receive midstream assets of about 200 miles of regulated transmission pipelines, as well as four storage pools with a total of 15.1 billion cubic feet, or Bcf, of working gas capacity. That, combined with long-term contracts with Peoples Gas for gas transmission, supply and storage services that will supply about 35 Bcf per year of Marcellus gas, are expected to generate at least $40 million per year.

EQT also announced that it will reduce its annual dividend effective January 2013. The new dividend rate of $0.12 per share reflects the blend of its two remaining core businesses — a dividend-supporting midstream business, and a capital-intensive, rapidly growing production business.

"Today's announcement allows us to focus on and reinvest in our rapidly growing natural gas production and midstream businesses. The proposed transaction provides capital to accelerate the monetization of our reserves beyond 2013 and also adds to our Marcellus midstream assets," said EQT Corp. CEO David Porges.

The transaction requires regulatory approvals from the Pennsylvania Public Utility Commission, the West Virginia Public Service Commission, the Kentucky Public Service Commission and the Federal Energy Regulatory Commission and is also subject to review under the Hart-Scott-Rodino Act.

EQT expects to receive the required approvals by the end of 2013 and noted that this transaction will not impact its previously announced 2013 capital program.