Natural gas producer EQT Corp. unveiled an aggressive plan of spending cuts, including a renegotiated rate structure on gathering and transportation pipelines, as it released fourth-quarter 2019 earnings that were better than expected.

EQT’s deal with EQM Midstream Partners LP, which was part of the same company until 2018, will result in a 35% reduction in gathering fees from 2024 through 2035. In exchange, EQT increased its minimum volume commitment to EQM to 3 billion cubic feet per day (Bcf/d) from the present 2.2 Bcf/d. After the in-service of the EQM-operated Mountain Valley Pipeline, expected on Jan. 1, 2021, the volume will increase to 4 Bcf/d by 2023.

“At a high level, this deal provides EQT with meaningful fee relief in the short term and favorable rates for the long term,” EQT President and CEO Toby Rice said during a call Feb. 27 with analysts. Rice and brother Derek Rice took over EQT in July following a nine-month proxy fight.

Already have an account? Log In

Thanks for reading Hart Energy.

Subscribe now to get unmatched coverage of the oil and gas industry’s entire landscape.

Get Access