EQT Corp. (NYSE: EQT) said on Tuesday that it is selling its natural gas processing complex in Langley, Kentucky and a natural gas liquids pipeline to MarkWest Energy Partners (NYSE: MWE) for $230 million.
The Langley processing complex includes a 100 million cubic feet per day (MMcfd) cryogenic processing plant, a 75 MMcfd refrigeration processing plant, and about 28 thousand horsepower of compression.
"The sale of these valuable Kentucky assets is the first step in our commitment to prioritize our capital to our most profitable investment opportunities, which for us means development activities, primarily in the Marcellus and also in the Huron/Berea, rather than processing activities," said David Porges, CEO of EQT.
Immediately after the the deal closes, MarkWest said it will start the installation of a new 60 MMcfd cryogenic processing plant to expand the Langley cryogenic processing capacity.
MarkWest will also complete the Ranger natural gas liquid (NGL) pipeline, which is currently under construction, to allow NGLs recovered at the Langley processing complex to be delivered to MarkWest's Siloam fractionation, storage, and marketing complex in South Shore, Kentucky.
In conjunction with the closing of the deal, EQT will execute a long-term agreement with MarkWest to provide processing services for its Kentucky Huron/Berea shale gas and to extend its existing agreement with MarkWest for NGL transportation, fractionation, and marketing services until 2022.
The deal is expected to close during the first quarter 2011.