(Mark One)
|
|
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
or
|
||
|
|
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
|
|
FOR THE TRANSITION PERIOD FROM TO
|
|
|
|
|
|
COMMISSION FILE NUMBER
|
001-35574
|
Delaware
|
|
37-1661577
|
(State or other jurisdiction of incorporation or organization)
|
|
(IRS Employer Identification No.)
|
Title of each class
|
|
Trading Symbol
|
|
Name of each exchange on which registered
|
Common Units Representing Limited Partner Interests
|
|
EQM
|
|
New York Stock Exchange
|
Large Accelerated Filer
|
☒
|
|
|
Accelerated Filer
|
☐
|
Emerging Growth Company
|
☐
|
Non-Accelerated Filer
|
☐
|
(Do not check if a
smaller reporting company)
|
|
Smaller Reporting Company
|
☐
|
|
|
|
Page No.
|
||
|
|
||
|
|
||
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Abbreviations
|
Measurements
|
ASU – Accounting Standards Update
|
Btu = one British thermal unit
|
FASB – Financial Accounting Standards Board
|
BBtu = billion British thermal units
|
FERC – U.S. Federal Energy Regulatory Commission
|
Bcf = billion cubic feet
|
GAAP – United States Generally Accepted Accounting Principles
|
Mcf = thousand cubic feet
|
IDRs – incentive distribution rights
|
MMcf = million cubic feet
|
IPO – Initial Public Offering
|
MMgal = million gallons
|
SEC – U.S. Securities and Exchange Commission
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(Thousands, except per unit amounts)
|
||||||||||||||
Operating revenues (b)
|
$
|
406,167
|
|
|
$
|
374,697
|
|
|
$
|
795,949
|
|
|
$
|
745,723
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating and maintenance (c)
|
46,556
|
|
|
43,270
|
|
|
74,439
|
|
|
70,442
|
|
||||
Selling, general and administrative (c)
|
26,406
|
|
|
27,712
|
|
|
59,326
|
|
|
54,102
|
|
||||
Separation and other transaction costs
|
15,358
|
|
|
5,350
|
|
|
18,871
|
|
|
5,350
|
|
||||
Depreciation
|
56,515
|
|
|
42,110
|
|
|
103,580
|
|
|
83,390
|
|
||||
Amortization of intangible assets
|
13,750
|
|
|
10,387
|
|
|
24,137
|
|
|
20,773
|
|
||||
Impairment of long-lived assets (d)
|
80,135
|
|
|
—
|
|
|
80,135
|
|
|
—
|
|
||||
Total operating expenses
|
238,720
|
|
|
128,829
|
|
|
360,488
|
|
|
234,057
|
|
||||
Operating income
|
167,447
|
|
|
245,868
|
|
|
435,461
|
|
|
511,666
|
|
||||
Equity income (e)
|
36,782
|
|
|
10,938
|
|
|
67,845
|
|
|
19,749
|
|
||||
Other income
|
1,959
|
|
|
944
|
|
|
4,169
|
|
|
1,848
|
|
||||
Net interest expense (f)
|
49,717
|
|
|
23,065
|
|
|
99,073
|
|
|
35,735
|
|
||||
Net income
|
156,471
|
|
|
234,685
|
|
|
408,402
|
|
|
497,528
|
|
||||
Net income attributable to noncontrolling interests
|
4,033
|
|
|
853
|
|
|
4,033
|
|
|
3,346
|
|
||||
Net income attributable to EQM
|
$
|
152,438
|
|
|
$
|
233,832
|
|
|
$
|
404,369
|
|
|
$
|
494,182
|
|
|
|
|
|
|
|
|
|
||||||||
Calculation of limited partner common unit interest in net income:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to EQM
|
$
|
152,438
|
|
|
$
|
233,832
|
|
|
$
|
404,369
|
|
|
$
|
494,182
|
|
Less: Series A Preferred Units interest in net income
|
(22,979
|
)
|
|
—
|
|
|
(22,979
|
)
|
|
—
|
|
||||
Less: pre-acquisition net income allocated to EQT
|
—
|
|
|
(72,620
|
)
|
|
—
|
|
|
(155,752
|
)
|
||||
Less: general partner interest in net income – general partner units
|
—
|
|
|
(1,700
|
)
|
|
—
|
|
|
(4,791
|
)
|
||||
Less: general partner interest in net income – IDRs
|
—
|
|
|
(68,121
|
)
|
|
—
|
|
|
(112,285
|
)
|
||||
Limited partner interest in net income
|
$
|
129,459
|
|
|
$
|
91,391
|
|
|
$
|
381,390
|
|
|
$
|
221,354
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per limited partner common unit – basic(g)
|
$
|
0.65
|
|
|
$
|
1.09
|
|
|
$
|
2.15
|
|
|
$
|
2.69
|
|
Net income per limited partner common unit – diluted(g)
|
$
|
0.62
|
|
|
$
|
1.09
|
|
|
$
|
2.07
|
|
|
$
|
2.69
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average limited partner common units outstanding – basic
|
200,482
|
|
|
83,553
|
|
|
177,498
|
|
|
82,290
|
|
||||
Weighted average limited partner common units outstanding – diluted
|
207,482
|
|
|
83,553
|
|
|
195,645
|
|
|
82,290
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash distributions declared per common unit (h)
|
$
|
1.160
|
|
|
$
|
1.09
|
|
|
$
|
2.305
|
|
|
$
|
2.155
|
|
(a)
|
As discussed in Notes 1 and 2, the consolidated financial statements of EQM have been retrospectively recast to include the pre-acquisition results of EQM Olympus Midstream LLC (EQM Olympus), Strike Force Midstream Holdings LLC (Strike Force) and EQM West Virginia Midstream LLC (EQM WV), which were acquired by EQM effective on May 1, 2018 (the Drop-Down Transaction), and Rice Midstream Partners LP (RMP), which was acquired by EQM effective on July 23, 2018 (the EQM-RMP Merger), because these transactions were between entities under common control.
|
(b)
|
Operating revenues included related party revenues from EQT Corporation (NYSE: EQT) (EQT) of $284.0 million and $285.3 million for the three months ended June 30, 2019 and 2018, respectively, and $568.5 million and $550.9 million for the six months ended June 30, 2019, respectively. See Note 8.
|
(c)
|
For the three and six months ended June 30, 2019, operating and maintenance expense included $15.2 million and $26.2 million of charges from Equitrans Midstream Corporation (Equitrans Midstream), respectively. For the three and six months ended June 30, 2018, operating and maintenance expense included charges from EQT of $12.3 million and $24.4 million, respectively. For the three and six months ended June 30, 2019, selling, general and administrative expense included charges from Equitrans Midstream of $23.5 million and $51.4 million, respectively. For the three and six months ended June 30, 2018, selling, general and administrative expense included charges from EQT of $25.6 million and $49.4 million, respectively. See Note 8.
|
(d)
|
See Note 3 for disclosure regarding impairment of certain of EQM's long-lived assets.
|
(e)
|
Represents equity income from Mountain Valley Pipeline, LLC (the MVP Joint Venture). See Note 9.
|
(f)
|
Net interest expense included interest income on the Preferred Interest in EQT Energy Supply, LLC (EES) of $1.6 million and $1.7 million for the three months ended June 30, 2019 and 2018, respectively, and $3.2 million and $3.3 million for the six months ended June 30, 2019 and 2018, respectively.
|
(g)
|
See Note 12 for further disclosure on EQM's calculation of net income per limited partner unit (basic and diluted).
|
(h)
|
Represents the cash distributions declared related to the period presented. See Note 12.
|
|
Six Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
|
(Thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
408,402
|
|
|
$
|
497,528
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation
|
103,580
|
|
|
83,390
|
|
||
Amortization of intangible assets
|
24,137
|
|
|
20,773
|
|
||
Impairment of long-lived assets (b)
|
80,135
|
|
|
—
|
|
||
Equity income
|
(67,845
|
)
|
|
(19,749
|
)
|
||
AFUDC – equity
|
(4,453
|
)
|
|
(2,137
|
)
|
||
Non-cash long-term compensation expense
|
255
|
|
|
639
|
|
||
Changes in other assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
(3,583
|
)
|
|
3,947
|
|
||
Accounts payable
|
(23,231
|
)
|
|
39,728
|
|
||
Other assets and other liabilities
|
(7,154
|
)
|
|
(1,212
|
)
|
||
Net cash provided by operating activities
|
510,243
|
|
|
622,907
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Capital expenditures
|
(527,803
|
)
|
|
(382,946
|
)
|
||
Capital contributions to the MVP Joint Venture
|
(301,175
|
)
|
|
(182,805
|
)
|
||
Bolt-on Acquisition (defined in Note 2), net of cash acquired
|
(848,625
|
)
|
|
—
|
|
||
Drop-Down Transaction
|
—
|
|
|
(1,193,160
|
)
|
||
Principal payments received on the Preferred Interest
|
2,298
|
|
|
2,172
|
|
||
Net cash used in investing activities
|
(1,675,305
|
)
|
|
(1,756,739
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from credit facility borrowings
|
1,047,000
|
|
|
2,390,500
|
|
||
Payments on credit facility borrowings
|
(572,000
|
)
|
|
(2,596,500
|
)
|
||
Pay-down of long-term debt associated with Bolt-on Acquisition (Note 2)
|
(28,325
|
)
|
|
—
|
|
||
Proceeds from issuance of long-term debt
|
—
|
|
|
2,500,000
|
|
||
Debt discount and issuance costs
|
—
|
|
|
(30,295
|
)
|
||
Proceeds from issuance of Series A Preferred Units, net of offering costs
|
1,158,313
|
|
|
—
|
|
||
Distributions paid to common unitholders
|
(440,816
|
)
|
|
(326,601
|
)
|
||
Distributions paid to noncontrolling interest
|
—
|
|
|
(750
|
)
|
||
Acquisition of 25% of Strike Force Midstream LLC
|
—
|
|
|
(175,000
|
)
|
||
Capital contributions
|
—
|
|
|
15,672
|
|
||
Net contributions from EQT
|
—
|
|
|
3,660
|
|
||
Net cash provided by financing activities
|
1,164,172
|
|
|
1,780,686
|
|
||
|
|
|
|
||||
Net change in cash and cash equivalents
|
(890
|
)
|
|
646,854
|
|
||
Cash and cash equivalents at beginning of period
|
17,515
|
|
|
54,600
|
|
||
Cash and cash equivalents at end of period
|
$
|
16,625
|
|
|
$
|
701,454
|
|
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
|
|
||
Interest, net of amount capitalized
|
$
|
106,001
|
|
|
$
|
33,621
|
|
|
|
|
|
||||
Non-cash activity during the period for:
|
|
|
|
|
|
||
Increase (decrease) in capital contribution receivable from Equitrans Midstream/EQT
|
$
|
497
|
|
|
$
|
(12,251
|
)
|
(a)
|
As discussed in Notes 1 and 2, the consolidated financial statements of EQM have been retrospectively recast to include the pre-acquisition results of the Drop-Down Transaction and the EQM-RMP Merger because these transactions were between entities under common control.
|
(b)
|
See Note 3 for disclosure regarding impairment of certain of EQM's long-lived assets.
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
|
(Thousands, except number of units)
|
||||||
ASSETS
|
|
||||||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
16,625
|
|
|
$
|
17,515
|
|
Accounts receivable (net of allowance for doubtful accounts of $138 and $75 as of June 30, 2019 and December 31, 2018, respectively) (a)
|
274,790
|
|
|
254,390
|
|
||
Other current assets
|
21,971
|
|
|
14,909
|
|
||
Total current assets
|
313,386
|
|
|
286,814
|
|
||
|
|
|
|
||||
Property, plant and equipment
|
8,158,272
|
|
|
6,367,530
|
|
||
Less: accumulated depreciation
|
(783,130
|
)
|
|
(560,902
|
)
|
||
Net property, plant and equipment
|
7,375,142
|
|
|
5,806,628
|
|
||
|
|
|
|
||||
Investment in unconsolidated entity
|
2,066,330
|
|
|
1,510,289
|
|
||
Goodwill
|
1,237,456
|
|
|
1,123,813
|
|
||
Net intangible assets
|
868,965
|
|
|
576,113
|
|
||
Other assets
|
201,891
|
|
|
152,464
|
|
||
Total assets
|
$
|
12,063,170
|
|
|
$
|
9,456,121
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable (b)
|
$
|
179,448
|
|
|
$
|
207,877
|
|
Due to Equitrans Midstream
|
76,863
|
|
|
44,509
|
|
||
Capital contribution payable to the MVP Joint Venture
|
356,223
|
|
|
169,202
|
|
||
Accrued interest
|
73,443
|
|
|
80,199
|
|
||
Accrued liabilities
|
38,265
|
|
|
20,672
|
|
||
Total current liabilities
|
724,242
|
|
|
522,459
|
|
||
|
|
|
|
||||
Credit facility borrowings
|
1,372,500
|
|
|
625,000
|
|
||
Senior notes
|
3,459,323
|
|
|
3,456,639
|
|
||
Regulatory and other long-term liabilities
|
81,093
|
|
|
38,724
|
|
||
Total liabilities
|
5,637,158
|
|
|
4,642,822
|
|
||
|
|
|
|
||||
Equity:
|
|
|
|
|
|
||
Series A Preferred Units (24,605,291 and 0 units issued and outstanding at June 30, 2019 and December 31, 2018, respectively)
|
1,181,292
|
|
|
—
|
|
||
Common (200,457,630 and 120,457,638 units issued and outstanding at June 30, 2019 and December 31, 2018, respectively)
|
4,748,269
|
|
|
4,783,673
|
|
||
Class B (7,000,000 and 0 units issued and outstanding at June 30, 2019 and December 31, 2018, respectively)
|
6,356
|
|
|
—
|
|
||
General partner (0 and 1,443,015 units issued and outstanding at June 30, 2019 and December 31, 2018, respectively)
|
—
|
|
|
29,626
|
|
||
Noncontrolling interest (c)
|
490,095
|
|
|
—
|
|
||
Total equity
|
6,426,012
|
|
|
4,813,299
|
|
||
Total liabilities and equity
|
$
|
12,063,170
|
|
|
$
|
9,456,121
|
|
(a)
|
Accounts receivable as of June 30, 2019 and December 31, 2018 included approximately $126.7 million and $174.8 million, respectively, of related party accounts receivable from EQT.
|
(b)
|
Accounts payable as of December 31, 2018 included approximately $34.0 million of related party accounts payable to EQT. There was no related party balance with EQT included in accounts payable as of June 30, 2019.
|
(c)
|
Noncontrolling interest as of June 30, 2019 represents third-party ownership in Eureka Midstream Holdings, LLC (Eureka Midstream). See Note 2 for further information.
|
|
|
|
Limited Partners
|
|
|
|
|
|
|
||||||||||||||||||
|
Predecessor Equity
|
|
Series A Preferred Units
|
|
Common Units
|
|
Class B Units
|
|
General Partner
|
|
Noncontrolling Interest
|
|
Total Equity
|
||||||||||||||
Balance at January 1, 2018
|
$
|
3,916,434
|
|
|
$
|
—
|
|
|
$
|
2,147,706
|
|
|
$
|
—
|
|
|
$
|
1,252
|
|
|
$
|
173,472
|
|
|
$
|
6,238,864
|
|
Net income
|
83,132
|
|
|
—
|
|
|
129,937
|
|
|
—
|
|
|
47,281
|
|
|
2,493
|
|
|
262,843
|
|
|||||||
Capital contributions
|
—
|
|
|
—
|
|
|
2,749
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
2,799
|
|
|||||||
Equity-based compensation plans
|
168
|
|
|
—
|
|
|
331
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
499
|
|
|||||||
Distributions paid to unitholders
($1.025 per common unit) |
(32,845
|
)
|
|
—
|
|
|
(82,596
|
)
|
|
—
|
|
|
(43,294
|
)
|
|
—
|
|
|
(158,735
|
)
|
|||||||
Net contributions from EQT
|
1,015
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,015
|
|
|||||||
Distributions paid to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(750
|
)
|
|
(750
|
)
|
|||||||
Balance at March 31, 2018
|
$
|
3,967,904
|
|
|
$
|
—
|
|
|
$
|
2,198,127
|
|
|
$
|
—
|
|
|
$
|
5,289
|
|
|
$
|
175,215
|
|
|
$
|
6,346,535
|
|
Net income
|
72,620
|
|
|
—
|
|
|
91,417
|
|
|
—
|
|
|
69,795
|
|
|
853
|
|
|
234,685
|
|
|||||||
Acquisition of 25% of Strike Force Midstream LLC
|
—
|
|
|
—
|
|
|
1,068
|
|
|
—
|
|
|
—
|
|
|
(176,068
|
)
|
|
(175,000
|
)
|
|||||||
Drop-Down Transaction
|
(1,436,297
|
)
|
|
—
|
|
|
243,137
|
|
|
|
|
|
|
—
|
|
|
(1,193,160
|
)
|
|||||||||
Capital contributions
|
—
|
|
|
—
|
|
|
612
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
622
|
|
|||||||
Equity-based compensation plans
|
140
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|||||||
Distributions paid to unitholders
($1.065 per common unit) |
(35,545
|
)
|
|
—
|
|
|
(85,830
|
)
|
|
—
|
|
|
(46,491
|
)
|
|
—
|
|
|
(167,866
|
)
|
|||||||
Net contributions from EQT
|
2,645
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,645
|
|
|||||||
Balance at June 30, 2018
|
$
|
2,571,467
|
|
|
$
|
—
|
|
|
$
|
2,448,531
|
|
|
$
|
—
|
|
|
$
|
28,603
|
|
|
$
|
—
|
|
|
$
|
5,048,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
Limited Partners
|
|
|
|
|
|
|
||||||||||||||||||
|
Predecessor Equity
|
|
Series A Preferred Units
|
|
Common Units
|
|
Class B Units
|
|
General Partner
|
|
Noncontrolling Interest
|
|
Total Equity
|
||||||||||||||
Balance at January 1, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,783,673
|
|
|
$
|
—
|
|
|
$
|
29,626
|
|
|
$
|
—
|
|
|
$
|
4,813,299
|
|
Net income
|
—
|
|
|
—
|
|
|
246,699
|
|
|
3,465
|
|
|
1,767
|
|
|
—
|
|
|
251,931
|
|
|||||||
Equity-based compensation plans
|
—
|
|
|
—
|
|
|
255
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
255
|
|
|||||||
Distributions paid to unitholders
($1.13 per common unit) |
—
|
|
|
—
|
|
|
(136,117
|
)
|
|
—
|
|
|
(75,175
|
)
|
|
—
|
|
|
(211,292
|
)
|
|||||||
Equity restructuring associated with the EQM IDR Transaction
|
—
|
|
|
—
|
|
|
(42,305
|
)
|
|
(1,477
|
)
|
|
43,782
|
|
|
—
|
|
|
—
|
|
|||||||
Balance at March 31, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,852,205
|
|
|
$
|
1,988
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,854,193
|
|
Net income
|
—
|
|
|
22,979
|
|
|
125,091
|
|
|
4,368
|
|
|
—
|
|
|
4,033
|
|
|
156,471
|
|
|||||||
Capital contributions
|
—
|
|
|
—
|
|
|
497
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
497
|
|
|||||||
Distributions paid to unitholders
($1.145 per common unit) |
—
|
|
|
—
|
|
|
(229,524
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(229,524
|
)
|
|||||||
Issuance of Series A Preferred Units, net of offering costs
|
—
|
|
|
1,158,313
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,158,313
|
|
|||||||
Bolt-on Acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
486,062
|
|
|
486,062
|
|
|||||||
Balance at June 30, 2019
|
$
|
—
|
|
|
$
|
1,181,292
|
|
|
$
|
4,748,269
|
|
|
$
|
6,356
|
|
|
$
|
—
|
|
|
$
|
490,095
|
|
|
$
|
6,426,012
|
|
(a)
|
As discussed in Notes 1 and 2, the consolidated financial statements of EQM have been retrospectively recast to include the pre-acquisition results of the Drop-Down Transaction and the EQM-RMP Merger because these transactions were between entities under common control.
|
1.
|
Financial Statements
|
2.
|
Acquisitions and Mergers
|
(in thousands)
|
|
Preliminary Purchase Price Allocation
|
||
Consideration given:
|
|
|
||
Cash consideration
|
|
$
|
861,250
|
|
Buyout of Eureka Midstream Class B Units and incentive compensation
|
|
2,530
|
|
|
Total consideration
|
|
863,780
|
|
|
|
|
|
||
Fair value of liabilities assumed:
|
|
|
||
Current liabilities
|
|
52,458
|
|
|
Long-term debt
|
|
300,825
|
|
|
Other long-term liabilities
|
|
10,203
|
|
|
Amount attributable to liabilities assumed
|
|
363,486
|
|
|
|
|
|
||
Fair value of assets acquired:
|
|
|
||
Cash
|
|
15,145
|
|
|
Accounts receivable
|
|
16,817
|
|
|
Inventory
|
|
12,991
|
|
|
Other current assets
|
|
882
|
|
|
Net property, plant and equipment
|
|
1,222,284
|
|
|
Intangible assets
|
|
317,000
|
|
|
Other assets
|
|
14,567
|
|
|
Amount attributable to assets acquired
|
|
1,599,686
|
|
|
|
|
|
||
Noncontrolling interest
|
|
(486,062
|
)
|
|
|
|
|
||
Goodwill
|
|
$
|
113,642
|
|
(in thousands)
|
|
As of June 30, 2019
|
||
Intangible assets
|
|
317,000
|
|
|
Less: accumulated amortization
|
|
3,375
|
|
|
Intangible assets, net
|
|
$
|
313,625
|
|
(in thousands)(unaudited)
|
|
April 10, 2019 through June 30, 2019
|
||
Operating revenues
|
|
$
|
28,928
|
|
Operating income attributable to EQM
|
|
$
|
12,496
|
|
Net income attributable to noncontrolling interests
|
|
$
|
4,033
|
|
Net income attributable to EQM
|
|
$
|
6,506
|
|
(in thousands, except per unit data)(unaudited)
|
|
Three Months Ended March 31, 2019
|
||
Pro forma operating revenues
|
|
$
|
421,362
|
|
Pro forma net income
|
|
$
|
264,215
|
|
Pro forma net income attributable to noncontrolling interests
|
|
$
|
3,205
|
|
Pro forma net income attributable to EQM
|
|
$
|
261,010
|
|
Pro forma income per unit (basic)
|
|
$
|
1.17
|
|
Pro forma income per unit (diluted)
|
|
$
|
1.12
|
|
(in thousands, except per unit data)(unaudited)
|
|
Three Months Ended June 30, 2018
|
|
Six Months Ended June 30, 2018
|
||||
Pro forma operating revenues
|
|
$
|
406,920
|
|
|
$
|
803,945
|
|
Pro forma net income
|
|
$
|
242,587
|
|
|
$
|
509,403
|
|
Pro forma net income attributable to noncontrolling interests
|
|
$
|
4,303
|
|
|
$
|
8,710
|
|
Pro forma net income attributable to EQM
|
|
$
|
238,284
|
|
|
$
|
500,693
|
|
Pro forma income per unit (basic)
|
|
$
|
1.06
|
|
|
$
|
2.24
|
|
Pro forma income per unit (diluted)
|
|
$
|
1.03
|
|
|
$
|
2.16
|
|
|
|
Goodwill and Purchase Price Allocation
|
||
|
|
(Thousands)
|
||
Estimated fair value of RMP, EQM Olympus, Strike Force(a) and EQM WV
|
|
$
|
4,014,984
|
|
|
|
|
||
Estimated Fair Value of Assets Acquired and Liabilities Assumed:
|
|
|
||
Current assets(b)
|
|
132,459
|
|
|
Intangible assets(c)
|
|
623,200
|
|
|
Property and equipment, net(d)
|
|
2,265,900
|
|
|
Other non-current assets
|
|
118
|
|
|
Current liabilities(b)
|
|
(117,124
|
)
|
|
RMP $850 Million Facility(e)
|
|
(266,000
|
)
|
|
Other non-current liabilities(e)
|
|
(9,323
|
)
|
|
Total estimated fair value of assets acquired and liabilities assumed
|
|
2,629,230
|
|
|
Goodwill as of November 13, 2017(f)
|
|
1,385,754
|
|
|
Impairment of goodwill (g)
|
|
261,941
|
|
|
Goodwill as of December 31, 2018
|
|
$
|
1,123,813
|
|
(a)
|
Includes the estimated fair value attributable to noncontrolling interest of $166 million.
|
(b)
|
The fair value of current assets and current liabilities were assumed to approximate their carrying values.
|
(c)
|
The identifiable intangible assets for customer relationships were estimated by applying a discounted cash flow approach which was adjusted for customer attrition assumptions and projected market conditions.
|
(d)
|
The estimated fair value of long-lived property and equipment were determined utilizing estimated replacement cost adjusted for a usage or obsolescence factor.
|
(e)
|
The estimated fair value of long-term liabilities was determined utilizing observable market inputs where available or estimated based on their then current carrying values.
|
(f)
|
Reflected the value of perceived growth opportunities, synergies and operating leverage anticipated through the acquisition and ownership of the acquired gathering assets as of November 13, 2017.
|
(g)
|
During its annual goodwill assessment for the year ended December 31, 2018, EQM determined that carrying value of the RMP PA Gas Gathering reporting unit, which comprises the Pennsylvania gathering assets acquired in the Rice Merger, was greater than its fair value. As a result, EQM recognized an impairment to goodwill of approximately $261.9 million.
|
3.
|
Impairment of Long-Lived Assets
|
4.
|
Leases
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended
June 30, 2019 |
||||
|
(Thousands)
|
||||||
Operating lease cost
|
$
|
2,852
|
|
|
$
|
4,149
|
|
Short-term lease cost
|
1,512
|
|
|
1,880
|
|
||
Variable lease cost
|
4
|
|
|
12
|
|
||
Total lease cost
|
$
|
4,368
|
|
|
$
|
6,041
|
|
|
June 30, 2019
|
||
|
(Thousands)
|
||
2019
|
$
|
5,619
|
|
2020
|
10,937
|
|
|
2021
|
9,161
|
|
|
2022
|
7,694
|
|
|
2023
|
5,607
|
|
|
2024
|
3,966
|
|
|
Thereafter
|
24,728
|
|
|
Total
|
67,712
|
|
|
Less: imputed interest
|
14,597
|
|
|
Present value of operating lease liability
|
$
|
53,115
|
|
5.
|
Equity
|
(1)
|
Units issued upon the resignation of a member of the Board of Directors of EQM's general partner.
|
(2)
|
In exchange for the cancellation of the EQM IDRs, EQM issued 87,000,000 EQM common units (the Exchange Consideration) to the Former EQM General Partner. At the effective time of the EQM IDR Merger, (i) the Exchange Consideration held by the Former EQM General Partner was canceled, (ii) 80,000,000 EQM common units and 7,000,000 Class B units were issued on a pro rata basis to certain affiliates of Equitrans Midstream, and (iii) 21,811,643 EQM common units held by EQGP were canceled and 21,811,643 EQM common units were issued pro rata to certain affiliates of Equitrans Midstream.
|
6.
|
Financial Information by Business Segment
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(Thousands)
|
||||||||||||||
Revenues from customers (including related parties):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
285,666
|
|
|
$
|
241,189
|
|
|
$
|
547,547
|
|
|
$
|
478,579
|
|
Transmission
|
92,767
|
|
|
89,145
|
|
|
202,626
|
|
|
196,079
|
|
||||
Water
|
27,734
|
|
|
44,363
|
|
|
45,776
|
|
|
71,065
|
|
||||
Total operating revenues
|
$
|
406,167
|
|
|
$
|
374,697
|
|
|
$
|
795,949
|
|
|
$
|
745,723
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
94,131
|
|
|
$
|
161,818
|
|
|
$
|
276,209
|
|
|
$
|
332,853
|
|
Transmission
|
63,244
|
|
|
60,642
|
|
|
147,994
|
|
|
140,093
|
|
||||
Water
|
10,072
|
|
|
23,408
|
|
|
11,258
|
|
|
38,720
|
|
||||
Total operating income
|
$
|
167,447
|
|
|
$
|
245,868
|
|
|
$
|
435,461
|
|
|
$
|
511,666
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of operating income to net income:
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity income (a)
|
$
|
36,782
|
|
|
$
|
10,938
|
|
|
$
|
67,845
|
|
|
$
|
19,749
|
|
Other income
|
1,959
|
|
|
944
|
|
|
4,169
|
|
|
1,848
|
|
||||
Net interest expense
|
49,717
|
|
|
23,065
|
|
|
99,073
|
|
|
35,735
|
|
||||
Net income
|
$
|
156,471
|
|
|
$
|
234,685
|
|
|
$
|
408,402
|
|
|
$
|
497,528
|
|
(a)
|
Equity income is included in the Transmission segment.
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
|
(Thousands)
|
||||||
Segment assets:
|
|
|
|
|
|
||
Gathering
|
$
|
8,031,401
|
|
|
$
|
6,011,654
|
|
Transmission (a)
|
3,636,355
|
|
|
3,066,659
|
|
||
Water
|
262,773
|
|
|
237,602
|
|
||
Total operating segments
|
11,930,529
|
|
|
9,315,915
|
|
||
Headquarters, including cash
|
132,641
|
|
|
140,206
|
|
||
Total assets
|
$
|
12,063,170
|
|
|
$
|
9,456,121
|
|
(a)
|
The equity investment in the MVP Joint Venture is included in the Transmission segment.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(Thousands)
|
||||||||||||||
Depreciation:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gathering
|
$
|
37,443
|
|
|
$
|
23,882
|
|
|
$
|
65,559
|
|
|
$
|
46,950
|
|
Transmission
|
12,594
|
|
|
12,430
|
|
|
25,127
|
|
|
24,871
|
|
||||
Water
|
6,478
|
|
|
5,798
|
|
|
12,894
|
|
|
11,569
|
|
||||
Total
|
$
|
56,515
|
|
|
$
|
42,110
|
|
|
$
|
103,580
|
|
|
$
|
83,390
|
|
|
|
|
|
|
|
|
|
||||||||
Expenditures for segment assets:
|
|
|
|
|
|
|
|
||||||||
Gathering(1)(2)
|
$
|
265,198
|
|
|
$
|
186,457
|
|
|
$
|
472,915
|
|
|
$
|
320,595
|
|
Transmission(3)
|
11,229
|
|
|
27,962
|
|
|
29,991
|
|
|
46,891
|
|
||||
Water
|
8,849
|
|
|
7,002
|
|
|
18,024
|
|
|
9,377
|
|
||||
Total(4)
|
$
|
285,276
|
|
|
$
|
221,421
|
|
|
$
|
520,930
|
|
|
$
|
376,863
|
|
(1)
|
Includes approximately $8.9 million and $58.6 million for the three and six months ended June 30, 2019, respectively, related to non-operating assets acquired from Equitrans Midstream in the Shared Assets Transaction that primarily support EQM's gathering activities.
|
(2)
|
Includes approximately $10.9 million of capital expenditures related to noncontrolling interests in Eureka Midstream for the three and six months ended June 30, 2019.
|
(3)
|
Transmission capital expenditures do not include capital contributions made to the MVP Joint Venture for the MVP and MVP Southgate projects of approximately $156.4 million and $65.8 million for the three months ended June 30, 2019 and 2018, respectively, and approximately $301.2 million and $182.8 million for the six months ended June 30, 2019 and 2018, respectively.
|
(4)
|
EQM accrues capital expenditures when work has been completed but the associated bills have not yet been paid. These accrued amounts are excluded from capital expenditures in the statements of consolidated cash flows until they are paid. Accrued capital expenditures were approximately $110.8 million, $137.8 million and $108.9 million at June 30, 2019, March 31, 2019 and December 31, 2018, respectively. Accrued capital expenditures were approximately $84.6 million, $75.5 million and $90.7 million at June 30, 2018, March 31, 2018 and December 31, 2017, respectively. On April 10, 2019, as a result of the Bolt-on Acquisition, EQM assumed $8.8 million of Eureka Midstream accrued capital expenditures.
|
7.
|
Revenue from Contracts with Customers
|
|
|
Three Months Ended June 30, 2019
|
||||||||||||||
|
|
Gathering
|
|
Transmission
|
|
Water
|
|
Total
|
||||||||
|
|
(Thousands)
|
||||||||||||||
Firm reservation fee revenues
|
|
$
|
147,771
|
|
|
$
|
81,836
|
|
|
$
|
—
|
|
|
$
|
229,607
|
|
Volumetric-based fee revenues
|
|
137,895
|
|
|
10,931
|
|
|
—
|
|
|
148,826
|
|
||||
Water services revenues
|
|
—
|
|
|
—
|
|
|
27,734
|
|
|
27,734
|
|
||||
Total operating revenues
|
|
$
|
285,666
|
|
|
$
|
92,767
|
|
|
$
|
27,734
|
|
|
$
|
406,167
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended June 30, 2018
|
||||||||||||||
|
|
Gathering
|
|
Transmission
|
|
Water
|
|
Total
|
||||||||
|
|
(Thousands)
|
||||||||||||||
Firm reservation fee revenues
|
|
$
|
111,702
|
|
|
$
|
82,222
|
|
|
$
|
—
|
|
|
$
|
193,924
|
|
Volumetric-based fee revenues
|
|
129,487
|
|
|
6,923
|
|
|
—
|
|
|
136,410
|
|
||||
Water services revenues
|
|
—
|
|
|
—
|
|
|
44,363
|
|
|
44,363
|
|
||||
Total operating revenues
|
|
$
|
241,189
|
|
|
$
|
89,145
|
|
|
$
|
44,363
|
|
|
$
|
374,697
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Six Months Ended June 30, 2019
|
||||||||||||||
|
|
Gathering
|
|
Transmission
|
|
Water
|
|
Total
|
||||||||
|
|
(Thousands)
|
||||||||||||||
Firm reservation fee revenues
|
|
$
|
276,730
|
|
|
$
|
181,060
|
|
|
$
|
—
|
|
|
$
|
457,790
|
|
Volumetric-based fee revenues
|
|
270,817
|
|
|
21,566
|
|
|
—
|
|
|
292,383
|
|
||||
Water service revenues
|
|
—
|
|
|
—
|
|
|
45,776
|
|
|
45,776
|
|
||||
Total operating revenues
|
|
$
|
547,547
|
|
|
$
|
202,626
|
|
|
$
|
45,776
|
|
|
$
|
795,949
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Six Months Ended June 30, 2018
|
||||||||||||||
|
|
Gathering
|
|
Transmission
|
|
Water
|
|
Total
|
||||||||
|
|
(Thousands)
|
||||||||||||||
Firm reservation fee revenues
|
|
$
|
221,635
|
|
|
$
|
179,997
|
|
|
$
|
—
|
|
|
$
|
401,632
|
|
Volumetric-based fee revenues
|
|
256,944
|
|
|
16,082
|
|
|
—
|
|
|
273,026
|
|
||||
Water service revenues
|
|
—
|
|
|
—
|
|
|
71,065
|
|
|
71,065
|
|
||||
Total operating revenues
|
|
$
|
478,579
|
|
|
$
|
196,079
|
|
|
$
|
71,065
|
|
|
$
|
745,723
|
|
|
|
2019(a)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
(Thousands)
|
|||||||||||||||||||||||||||
Gathering firm reservation fees
|
|
$
|
253,531
|
|
|
$
|
566,813
|
|
|
$
|
614,356
|
|
|
$
|
614,356
|
|
|
$
|
614,264
|
|
|
$
|
2,647,183
|
|
|
$
|
5,310,503
|
|
Gathering revenues supported by MVCs
|
|
45,877
|
|
|
95,294
|
|
|
100,715
|
|
|
100,715
|
|
|
100,715
|
|
|
309,214
|
|
|
752,530
|
|
|||||||
Transmission firm reservation fees
|
|
163,370
|
|
|
334,627
|
|
|
345,527
|
|
|
340,453
|
|
|
336,333
|
|
|
2,478,310
|
|
|
3,998,620
|
|
|||||||
Total
|
|
$
|
462,778
|
|
|
$
|
996,734
|
|
|
$
|
1,060,598
|
|
|
$
|
1,055,524
|
|
|
$
|
1,051,312
|
|
|
$
|
5,434,707
|
|
|
$
|
10,061,653
|
|
(a)
|
July 1, 2019 through December 31, 2019.
|
8.
|
Related Party Transactions
|
9.
|
Investment in Unconsolidated Entity
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
|
(Thousands)
|
||||||
Current assets
|
$
|
836,397
|
|
|
$
|
687,657
|
|
Non-current assets
|
4,033,475
|
|
|
3,223,220
|
|
||
Total assets
|
$
|
4,869,872
|
|
|
$
|
3,910,877
|
|
|
|
|
|
||||
Current liabilities
|
$
|
420,534
|
|
|
$
|
617,355
|
|
Non-current liabilities
|
2,166
|
|
|
—
|
|
||
Equity
|
4,447,172
|
|
|
3,293,522
|
|
||
Total liabilities and equity
|
$
|
4,869,872
|
|
|
$
|
3,910,877
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(Thousands)
|
||||||||||||||
Environmental remediation reserve
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
(2,166
|
)
|
|
$
|
—
|
|
Other income
|
1,785
|
|
|
743
|
|
|
4,698
|
|
|
1,277
|
|
||||
Net interest income
|
23,700
|
|
|
6,989
|
|
|
43,935
|
|
|
12,638
|
|
||||
AFUDC - equity
|
55,298
|
|
|
16,307
|
|
|
102,514
|
|
|
29,489
|
|
||||
Net income
|
$
|
80,809
|
|
|
$
|
24,039
|
|
|
$
|
148,981
|
|
|
$
|
43,404
|
|
11.
|
Fair Value Measurements
|
12.
|
Net Income per Limited Partner Unit and Cash Distributions
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018(1)
|
|
2019
|
|
2018(1)
|
||||||||
|
(Thousands, except per unit data)
|
||||||||||||||
Net income attributable to EQM
|
$
|
152,438
|
|
|
$
|
233,832
|
|
|
$
|
404,369
|
|
|
$
|
494,182
|
|
Less: Series A Preferred Units interest in net income
|
(22,979
|
)
|
|
—
|
|
|
(22,979
|
)
|
|
—
|
|
||||
Less: pre-acquisition net income allocated to parent
|
—
|
|
|
(72,620
|
)
|
|
—
|
|
|
(155,752
|
)
|
||||
Less: general partner interest in net income – general partner units
|
—
|
|
|
(1,700
|
)
|
|
—
|
|
|
(4,791
|
)
|
||||
Less: general partner interest in net income – IDRs
|
—
|
|
|
(68,121
|
)
|
|
—
|
|
|
(112,285
|
)
|
||||
Limited partner interest in net income
|
$
|
129,459
|
|
|
$
|
91,391
|
|
|
$
|
381,390
|
|
|
$
|
221,354
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income allocable to common units
|
$
|
129,459
|
|
|
$
|
91,391
|
|
|
$
|
381,390
|
|
|
$
|
221,354
|
|
Net income allocable to Class B units
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average limited partner common units outstanding - basic
|
200,482
|
|
|
83,553
|
|
|
177,498
|
|
|
82,290
|
|
||||
Weighted average limited partner common units outstanding - diluted(2)
|
207,482
|
|
|
83,553
|
|
|
195,645
|
|
|
82,290
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per limited partner common unit - basic
|
$
|
0.65
|
|
|
$
|
1.09
|
|
|
$
|
2.15
|
|
|
$
|
2.69
|
|
Net income per limited partner common unit - diluted
|
$
|
0.62
|
|
|
$
|
1.09
|
|
|
$
|
2.07
|
|
|
$
|
2.69
|
|
(1)
|
Net income attributable to the Drop-Down Transaction and the EQM-RMP Merger for the periods prior to May 1, 2018 and July 23, 2018, respectively, was not allocated to the limited partners for purposes of calculating net income per limited partner unit as these pre-acquisition amounts were not available to the EQM unitholders.
|
(2)
|
For the three months ended June 30, 2019, 7,000,000 Class B units were included in the calculation of diluted weighted average limited partner units outstanding based upon the application of the if-converted method. The effect of Series A Preferred Units was anti-dilutive. For the six months ended June 30, 2019, 7,000,000 Class B units and 11,147,148 Series A Preferred Units and Class B units were included in the calculation of diluted weighted average limited partner units outstanding based upon the application of the if-converted method. Class B units are not a participating security as they do not participate in distributions.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2019
|
|
2018 (1)
|
|
% Change
|
|
2019
|
|
2018 (1)
|
|
% Change
|
||||||||||
|
(Thousands, except per day amounts)
|
||||||||||||||||||||
FINANCIAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Firm reservation fee revenues (2)
|
$
|
147,771
|
|
|
$
|
111,702
|
|
|
32.3
|
|
|
$
|
276,730
|
|
|
$
|
221,635
|
|
|
24.9
|
|
Volumetric-based fee revenues
|
137,895
|
|
|
129,487
|
|
|
6.5
|
|
|
270,817
|
|
|
256,944
|
|
|
5.4
|
|
||||
Total operating revenues
|
285,666
|
|
|
241,189
|
|
|
18.4
|
|
|
547,547
|
|
|
478,579
|
|
|
14.4
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating and maintenance
|
25,480
|
|
|
20,588
|
|
|
23.8
|
|
|
40,733
|
|
|
35,701
|
|
|
14.1
|
|
||||
Selling, general and administrative
|
19,369
|
|
|
19,164
|
|
|
1.1
|
|
|
41,903
|
|
|
36,952
|
|
|
13.4
|
|
||||
Separation and other transaction costs
|
15,358
|
|
|
5,350
|
|
|
187.1
|
|
|
18,871
|
|
|
5,350
|
|
|
252.7
|
|
||||
Depreciation
|
37,443
|
|
|
23,882
|
|
|
56.8
|
|
|
65,559
|
|
|
46,950
|
|
|
39.6
|
|
||||
Amortization of intangible assets
|
13,750
|
|
|
10,387
|
|
|
32.4
|
|
|
24,137
|
|
|
20,773
|
|
|
16.2
|
|
||||
Impairment of long-lived assets
|
80,135
|
|
|
—
|
|
|
100.0
|
|
|
80,135
|
|
|
—
|
|
|
100.0
|
|
||||
Total operating expenses
|
191,535
|
|
|
79,371
|
|
|
141.3
|
|
|
271,338
|
|
|
145,726
|
|
|
86.2
|
|
||||
Operating income
|
$
|
94,131
|
|
|
$
|
161,818
|
|
|
(41.8
|
)
|
|
$
|
276,209
|
|
|
$
|
332,853
|
|
|
(17.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATIONAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gathered volumes (BBtu per day)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Firm capacity reservation (2)
|
3,555
|
|
|
2,007
|
|
|
77.1
|
|
|
3,067
|
|
|
1,986
|
|
|
54.4
|
|
||||
Volumetric-based services
|
4,350
|
|
|
4,202
|
|
|
3.5
|
|
|
4,272
|
|
|
4,217
|
|
|
1.3
|
|
||||
Total gathered volumes
|
7,905
|
|
|
6,209
|
|
|
27.3
|
|
|
7,339
|
|
|
6,203
|
|
|
18.3
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures(3)(4)
|
$
|
265,198
|
|
|
$
|
186,457
|
|
|
42.2
|
|
|
$
|
472,915
|
|
|
$
|
320,595
|
|
|
47.5
|
|
(1)
|
Includes the pre-acquisition results of the Drop-Down Transaction and the EQM-RMP Merger, which were effective on May 1, 2018 and July 23, 2018, respectively. The recast is for the period the acquired businesses were under the common control of EQT, which began on November 13, 2017 as a result of the Rice Merger.
|
(2)
|
Includes revenues and volumes from contracts with MVCs.
|
(3)
|
Includes approximately $8.9 million and $58.6 million for the three and six months ended June 30, 2019, respectively, related to non-operating assets acquired from Equitrans Midstream in the Shared Assets Transaction that primarily support EQM's gathering activities. See Note 2 for further detail.
|
(4)
|
Includes approximately $10.9 million of capital expenditures related to noncontrolling interests in Eureka Midstream for the three and six months ended June 30, 2019.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
||||||||||
|
(Thousands, except per day amounts)
|
||||||||||||||||||||
FINANCIAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Firm reservation fee revenues
|
$
|
81,836
|
|
|
$
|
82,222
|
|
|
(0.5
|
)
|
|
$
|
181,060
|
|
|
$
|
179,997
|
|
|
0.6
|
|
Volumetric based fee revenues
|
10,931
|
|
|
6,923
|
|
|
57.9
|
|
|
21,566
|
|
|
16,082
|
|
|
34.1
|
|
||||
Total operating revenues
|
92,767
|
|
|
89,145
|
|
|
4.1
|
|
|
202,626
|
|
|
196,079
|
|
|
3.3
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating and maintenance
|
10,082
|
|
|
8,810
|
|
|
14.4
|
|
|
14,166
|
|
|
16,361
|
|
|
(13.4
|
)
|
||||
Selling, general and administrative
|
6,847
|
|
|
7,263
|
|
|
(5.7
|
)
|
|
15,339
|
|
|
14,754
|
|
|
4.0
|
|
||||
Depreciation
|
12,594
|
|
|
12,430
|
|
|
1.3
|
|
|
25,127
|
|
|
24,871
|
|
|
1.0
|
|
||||
Total operating expenses
|
29,523
|
|
|
28,503
|
|
|
3.6
|
|
|
54,632
|
|
|
55,986
|
|
|
(2.4
|
)
|
||||
Operating income
|
$
|
63,244
|
|
|
$
|
60,642
|
|
|
4.3
|
|
|
$
|
147,994
|
|
|
$
|
140,093
|
|
|
5.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity income
|
$
|
36,782
|
|
|
$
|
10,938
|
|
|
236.3
|
|
|
$
|
67,845
|
|
|
$
|
19,749
|
|
|
243.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATIONAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Transmission pipeline throughput (BBtu per day)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Firm capacity reservation
|
2,647
|
|
|
2,826
|
|
|
(6.3
|
)
|
|
2,802
|
|
|
2,821
|
|
|
(0.7
|
)
|
||||
Volumetric based services
|
211
|
|
|
41
|
|
|
414.6
|
|
|
158
|
|
|
41
|
|
|
285.4
|
|
||||
Total transmission pipeline throughput
|
2,858
|
|
|
2,867
|
|
|
(0.3
|
)
|
|
2,960
|
|
|
2,862
|
|
|
3.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average contracted firm transmission reservation commitments
(BBtu per day)
|
3,649
|
|
|
3,607
|
|
|
1.2
|
|
|
4,045
|
|
|
3,873
|
|
|
4.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
$
|
11,229
|
|
|
$
|
27,962
|
|
|
(59.8
|
)
|
|
$
|
29,991
|
|
|
$
|
46,891
|
|
|
(36.0
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
2019
|
|
2018 (1)
|
|
% Change
|
|
2019
|
|
2018 (1)
|
|
% Change
|
||||||||||
|
(Thousands)
|
||||||||||||||||||||
FINANCIAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Water services revenues
|
$
|
27,734
|
|
|
$
|
44,363
|
|
|
(37.5
|
)
|
|
$
|
45,776
|
|
|
$
|
71,065
|
|
|
(35.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating and maintenance
|
10,994
|
|
|
13,872
|
|
|
(20.7
|
)
|
|
19,540
|
|
|
18,380
|
|
|
6.3
|
|
||||
Selling, general and administrative
|
190
|
|
|
1,285
|
|
|
(85.2
|
)
|
|
2,084
|
|
|
2,396
|
|
|
(13.0
|
)
|
||||
Depreciation
|
6,478
|
|
|
5,798
|
|
|
11.7
|
|
|
12,894
|
|
|
11,569
|
|
|
11.5
|
|
||||
Total operating expenses
|
17,662
|
|
|
20,955
|
|
|
(15.7
|
)
|
|
34,518
|
|
|
32,345
|
|
|
6.7
|
|
||||
Operating income
|
$
|
10,072
|
|
|
$
|
23,408
|
|
|
(57.0
|
)
|
|
$
|
11,258
|
|
|
$
|
38,720
|
|
|
(70.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OPERATIONAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Water services volumes (MMgal)
|
619
|
|
|
750
|
|
|
(17.5
|
)
|
|
988
|
|
|
1,291
|
|
|
(23.5
|
)
|
||||
Capital expenditures
|
$
|
8,849
|
|
|
$
|
7,002
|
|
|
26.4
|
|
|
$
|
18,024
|
|
|
$
|
9,377
|
|
|
92.2
|
|
(1)
|
EQM's consolidated financial statements have been retrospectively recast to include the pre-acquisition results of the EQM-RMP Merger, which was effective July 23, 2018. The recast is for the period the acquired businesses were under the common control of EQT, which began on November 13, 2017 as a result of the Rice Merger.
|
•
|
EQM's operating performance as compared to other publicly traded partnerships in the midstream energy industry without regard to historical cost basis or, in the case of adjusted EBITDA, financing methods;
|
•
|
the ability of EQM's assets to generate sufficient cash flow to make distributions to EQM's unitholders;
|
•
|
EQM's ability to incur and service debt and fund capital expenditures; and
|
•
|
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(Thousands)
|
||||||||||||||
Net income
|
$
|
156,471
|
|
|
$
|
234,685
|
|
|
$
|
408,402
|
|
|
$
|
497,528
|
|
Add:
|
|
|
|
|
|
|
|
||||||||
Net interest expense
|
49,717
|
|
|
23,065
|
|
|
99,073
|
|
|
35,735
|
|
||||
Depreciation
|
56,515
|
|
|
42,110
|
|
|
103,580
|
|
|
83,390
|
|
||||
Amortization of intangible assets
|
13,750
|
|
|
10,387
|
|
|
24,137
|
|
|
20,773
|
|
||||
Impairment of long-lived assets
|
80,135
|
|
|
—
|
|
|
80,135
|
|
|
—
|
|
||||
Preferred Interest payments
|
2,746
|
|
|
2,746
|
|
|
5,492
|
|
|
5,492
|
|
||||
Non-cash long-term compensation expense
|
—
|
|
|
140
|
|
|
255
|
|
|
639
|
|
||||
Separation and other transaction costs
|
15,358
|
|
|
5,350
|
|
|
18,871
|
|
|
5,350
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Equity income
|
(36,782
|
)
|
|
(10,938
|
)
|
|
(67,845
|
)
|
|
(19,749
|
)
|
||||
AFUDC – equity
|
(2,107
|
)
|
|
(1,072
|
)
|
|
(4,453
|
)
|
|
(2,137
|
)
|
||||
Adjusted EBITDA attributable to noncontrolling interest(1)
|
(7,916
|
)
|
|
—
|
|
|
(7,916
|
)
|
|
—
|
|
||||
Adjusted EBITDA attributable to the Drop-Down Transaction(2)
|
—
|
|
|
(17,270
|
)
|
|
—
|
|
|
(63,853
|
)
|
||||
Adjusted EBITDA attributable to RMP prior to the merger(3)
|
—
|
|
|
(79,695
|
)
|
|
—
|
|
|
(149,229
|
)
|
||||
Adjusted EBITDA
|
$
|
327,887
|
|
|
$
|
209,508
|
|
|
$
|
659,731
|
|
|
$
|
413,939
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Net interest expense excluding interest income on the Preferred Interest(4)
|
(50,521
|
)
|
|
(22,336
|
)
|
|
(101,483
|
)
|
|
(34,836
|
)
|
||||
Capitalized interest and AFUDC – debt(4)
|
(7,564
|
)
|
|
(1,940
|
)
|
|
(12,251
|
)
|
|
(2,757
|
)
|
||||
Ongoing maintenance capital expenditures net of expected reimbursements(4)(5)
|
(8,151
|
)
|
|
(7,115
|
)
|
|
(17,549
|
)
|
|
(10,980
|
)
|
||||
Series A Preferred Unit distributions(6)
|
(22,979
|
)
|
|
—
|
|
|
(22,979
|
)
|
|
—
|
|
||||
Distributable cash flow(7)
|
$
|
238,672
|
|
|
$
|
178,117
|
|
|
$
|
505,469
|
|
|
$
|
365,366
|
|
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities
|
$
|
349,270
|
|
|
$
|
338,950
|
|
|
$
|
510,243
|
|
|
$
|
622,907
|
|
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Capitalized interest and AFUDC – debt(4)
|
(7,564
|
)
|
|
(1,940
|
)
|
|
(12,251
|
)
|
|
(2,757
|
)
|
||||
Principal payments received on the Preferred Interest
|
1,157
|
|
|
1,093
|
|
|
2,298
|
|
|
2,172
|
|
||||
Ongoing maintenance capital expenditures net of expected reimbursements(4)(5)
|
(8,151
|
)
|
|
(7,115
|
)
|
|
(17,549
|
)
|
|
(10,980
|
)
|
||||
Adjusted EBITDA attributable to noncontrolling interest(1)
|
(7,916
|
)
|
|
—
|
|
|
(7,916
|
)
|
|
—
|
|
||||
Adjusted EBITDA attributable to the Drop-Down Transaction(2)
|
—
|
|
|
(17,270
|
)
|
|
—
|
|
|
(63,853
|
)
|
||||
Adjusted EBITDA attributable to RMP prior to the merger(3)
|
—
|
|
|
(79,695
|
)
|
|
—
|
|
|
(149,229
|
)
|
||||
Series A Preferred Unit distributions(6)
|
(22,979
|
)
|
|
—
|
|
|
(22,979
|
)
|
|
—
|
|
||||
Other, including changes in working capital
|
(65,145
|
)
|
|
(55,906
|
)
|
|
53,623
|
|
|
(32,894
|
)
|
||||
Distributable cash flow(7)
|
$
|
238,672
|
|
|
$
|
178,117
|
|
|
$
|
505,469
|
|
|
$
|
365,366
|
|
(1)
|
Reflects adjusted EBITDA attributable to noncontrolling interest associated with the third-party ownership interest in Eureka Midstream. Adjusted EBITDA attributable to noncontrolling interest for the three and six months ended June 30, 2019 was calculated as net income of $4.9 million plus depreciation of $2.2 million and interest expense of $0.8 million.
|
(2)
|
Adjusted EBITDA attributable to the Drop-Down Transaction for the period prior to May 1, 2018 was subtracted as part of EQM's adjusted EBITDA calculations as these amounts were generated by assets acquired in the Drop-Down Transaction prior to acquisition by EQM; therefore, the amounts could not have been distributed to EQM's unitholders. Adjusted EBITDA attributable to the Drop-Down Transaction for the three and six months ended June 30, 2018 was calculated as net income of $12.3 million and $44.4 million, respectively, plus depreciation expense of $1.6 million and $5.8 million, respectively, plus amortization of intangible assets of $3.5 million and $13.8 million, respectively, less interest income of less than $0.1 million and $0.1 million, respectively.
|
(3)
|
Adjusted EBITDA attributable to RMP for the period prior to July 23, 2018 was subtracted as part of EQM's adjusted EBITDA calculations as these amounts were generated by RMP prior to acquisition by EQM. Adjusted EBITDA attributable to RMP for the three and six months ended June 30, 2018 was calculated as net income of $61.2 million and $114.7 million, respectively, plus net interest expense of $2.4 million and $4.3 million, respectively, plus depreciation expense of $14.0 million and $27.9 million, respectively, plus non-cash compensation expense of $0.1 million and $0.3 million, respectively, plus separation and other transaction costs of $1.9 million.
|
(4)
|
Does not reflect amounts related to the non-controlling interest share of Eureka Midstream.
|
(5)
|
Ongoing maintenance capital expenditures net of expected reimbursements excludes ongoing maintenance that EQM expects to be reimbursed or that was reimbursed by Equitrans Midstream in 2019, or by EQT in 2018, under the terms of the EQT Omnibus Agreement of $0.5 million and $0.6 million for the three months ended June 30, 2019 and 2018, respectively, and $0.5 million and $3.4 million for the six months ended June 30, 2019 and 2018, respectively. For the three and six months ended June 30, 2018, ongoing maintenance capital expenditures net of expected reimbursements also excluded $1.0 million and $1.1 million of ongoing maintenance capital expenditures attributable to RMP prior to the EQM-RMP Merger.
|
(6)
|
Reflects the pro rata distribution to the Series A Preferred Units based on the closing of the Private Placement on April 10, 2019. The Series A Preferred Unit unitholders' distribution is payable on August 13, 2019.
|
(7)
|
EQM believes that calculating distributable cash flow without deducting separation and other transaction costs provides investors with greater insight into the period-to-period ability of EQM’s ongoing assets and operations to generate cash flow. If separation and other transaction costs were deducted from the calculation, EQM’s distributable cash flow for the three and six month periods ended June 30, 2019 would have been $223.3 million and $486.6 million, respectively, and $172.8 million and $360.0 million for the three and six months ended June 30, 2018, respectively.
|
•
|
Mountain Valley Pipeline. The MVP Joint Venture is a joint venture among EQM and affiliates of each of NextEra Energy, Inc., Con Edison, AltaGas Ltd. and RGC Resources, Inc. that is constructing the MVP. As of June 30, 2019, EQM is the operator of the MVP and owned a 45.5% interest in the MVP project. 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 will span from EQM's existing transmission and storage system in Wetzel County, West Virginia to Pittsylvania County, Virginia, providing access to the growing southeast demand markets. During the six months ended June 30, 2019, EQM made capital contributions of approximately $292 million to the MVP Joint Venture for the MVP project. For the remainder of 2019, EQM expects to make capital contributions of approximately $0.7 billion to $0.8 billion to the MVP Joint Venture for purposes of the MVP, depending on the timing of the construction of the MVP. The MVP Joint Venture has secured a total of 2.0 Bcf per day of firm capacity commitments at 20-year terms and is currently 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. The MVP Joint Venture is also undertaking the MVP Southgate project and is evaluating other future pipeline extension projects.
|
•
|
Wellhead Gathering Expansion and Hammerhead Project. During the six months ended June 30, 2019, EQM invested approximately $395 million in gathering expansion projects. For the remainder of 2019, EQM expects to invest approximately $575 million in gathering expansion projects, including the continued gathering infrastructure expansion of core development areas in the Marcellus and Utica Shales, primarily in southwestern Pennsylvania and eastern Ohio, for EQT, Range Resources Corporation (Range Resources) and other producers, and the Hammerhead project, a 1.6 Bcf per day gathering header pipeline that is primarily designed to connect natural gas produced in Pennsylvania and West Virginia to the MVP and is supported by a 1.2 Bcf per day firm capacity commitment from EQT. The Hammerhead project is expected to cost approximately $555 million. During the six months ended June 30, 2019, EQM invested approximately $153 million in the Hammerhead project. For the remainder of 2019, EQM expects to invest approximately $200 million in the Hammerhead project. A portion of the Hammerhead project is expected to be operational by year-end 2019 and will provide interruptible service until the MVP is placed in-service, at which time the firm capacity commitment will begin.
|
•
|
MVP Southgate Project. In April 2018, the MVP Joint Venture announced the MVP Southgate project, a proposed 70-mile interstate pipeline that will 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 PSNC Energy. As designed, the MVP Southgate project has expansion capabilities up to 900 MMcf per day of total capacity. The MVP Southgate project is estimated to cost a total of approximately $450 million to $500 million, which is expected to be spent primarily in 2019 and 2020. During the six months ended June 30, 2019, EQM made capital contributions of approximately $8 million to the MVP Joint Venture for the MVP Southgate project. For the remainder of 2019, EQM expects to provide capital contributions of approximately $15 million to the MVP Joint Venture for the MVP Southgate project. As of June 30, 2019, EQM was the operator of the MVP Southgate pipeline and 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. In March 2019, the FERC issued an
|
•
|
Transmission Expansion. During the six months ended June 30, 2019, EQM invested approximately $27 million in transmission expansion projects. For the remainder of 2019, EQM expects to invest approximately $25 million in transmission expansion projects, primarily attributable to the Allegheny Valley Connector (AVC), the Equitrans, L.P. Expansion project (EEP), which is designed to provide north-to-south capacity on the mainline Equitrans, L.P. system, including for deliveries to the MVP, and power plant projects. A portion of EEP is expected to commence operations with interruptible service in the third quarter of 2019. EEP will provide capacity of approximately 600 MMcf per day and offers access to several markets through interconnects with Texas Eastern Transmission, Dominion Transmission and Columbia Gas Transmission. EEP will also provide delivery into MVP and once MVP is placed in service, firm transportation agreements for 550 MMcf per day of capacity will commence under 20-year terms. EEP has a targeted full in-service date of mid-2020. In January 2019, EQM executed a precedent agreement with ESC Brooke County Power I, LLC to construct a natural gas pipeline for connection to a proposed 830-Megawatt power plant in Brooke County, West Virginia. The agreement includes a ten-year firm reservation commitment for 140 MMcf per day of capacity. EQM expects to invest an estimated $80 million to construct the approximately 16-mile pipeline, which has a targeted in-service date in 2023. As of June 30, 2019, EQM has invested approximately $1 million in the Brooke County project and expects to invest an additional $6 million for the remainder of 2019.
|
•
|
Water Expansion. During the six months ended June 30, 2019, EQM invested approximately $18 million in the expansion of its fresh water delivery infrastructure. In response to continued lower natural gas prices, several producer customers have modified their well development plans, which impacts the expected timing of EQM's fresh water delivery services. As a result, EQM now forecasts full-year 2019 water expansion capital expenditures of $50 million.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018(1)
|
|
2019
|
|
2018(1)
|
||||||||
|
(Thousands)
|
||||||||||||||
Expansion capital expenditures (2)
|
$
|
266,970
|
|
|
$
|
213,628
|
|
|
$
|
443,479
|
|
|
$
|
361,705
|
|
Maintenance capital expenditures
|
9,426
|
|
|
7,793
|
|
|
18,854
|
|
|
15,158
|
|
||||
Total capital expenditures (3)(4)(5)
|
$
|
276,396
|
|
|
$
|
221,421
|
|
|
$
|
462,333
|
|
|
$
|
376,863
|
|
(1)
|
EQM's expansion and maintenance capital expenditures have been retrospectively recast to include the pre-acquisition results of the Drop-Down Transaction and the EQM-RMP Merger because these transactions were between entities under common control.
|
(2)
|
Expansion capital expenditures do not include capital contributions made to the MVP Joint Venture for the MVP and MVP Southgate projects of approximately $156.4 million and $65.8 million for the three months ended June 30, 2019 and 2018, respectively, and approximately $301.2 million and $182.8 million for the six months ended June 30, 2019 and 2018, respectively.
|
(3)
|
Expansion capital expenditures for the three and six months ended June 30, 2019 do not include approximately $8.9 million and $58.6 million, respectively, of non-operating assets acquired from Equitrans Midstream in the Shared Assets Transaction that primarily support EQM's gathering activities. See Note 2 to the consolidated financial statements for further detail.
|
(4)
|
Includes approximately $10.9 million of capital expenditures related to noncontrolling interests in Eureka Midstream for the three and six months ended June 30, 2019.
|
(5)
|
EQM accrues capital expenditures when the work has been completed but the associated bills have not yet been paid. These accrued amounts are excluded from capital expenditures in the statements of consolidated cash flows until they are paid in a subsequent period. See Note 6 to the consolidated financial statements.
|
Rating Service
|
|
Senior Notes
|
|
Outlook
|
Moody's Investors Service (Moody's)
|
|
Ba1
|
|
Stable
|
Standard & Poor's Ratings Services (S&P)
|
|
BBB-
|
|
Negative
|
Fitch Ratings (Fitch)
|
|
BBB-
|
|
Negative
|
•
|
Sierra Club, et al. v. U.S. Army Corps of Engineers, et al., consolidated under Case No. 18-1173, Fourth Circuit Court of Appeals (Fourth Circuit). In February 2018, the Sierra Club filed a lawsuit in the Fourth Circuit against the U.S. Army Corps of Engineers (the U.S. Army Corps). The lawsuit challenges the verification by the Huntington District of the U.S. Army Corps that Nationwide Permit 12, which generally authorizes discharges of dredge or fill material into waters of the United States and the construction of pipelines across such waters under Section 404 of the Clean Water Act, could be utilized in the Huntington District (which covers all but the northernmost area of West Virginia) for the MVP project. The crux of Sierra Club's position was that the MVP Joint Venture, pursuant to its FERC license, planned to use a certain methodology (dry open cut creek crossing methodology) to construct the pipeline across streams in West Virginia that would take considerably longer than the 72 hours allowed for such activities pursuant to the terms of West Virginia's Clean Water Act Section 401 certification for Nationwide Permit 12. A three-judge panel of the Fourth Circuit agreed with the Sierra Club and on October 2, 2018, issued a preliminary order stopping the construction in West Virginia of that portion of the pipeline that is subject to Nationwide Permit 12. Following the issuance of the court's preliminary order, the U.S. Army Corps' Pittsburgh District (which had also verified use of Nationwide Permit 12 by MVP in the northern corner of West Virginia) suspended its verification that allowed the
|
•
|
WVDEP Rulemaking Proceedings – Section 401 Nationwide Permit. On April 13, 2017, the West Virginia Department of Environmental Protection (WVDEP) issued a 401 Water Quality Certification for the U.S. Army Corps Nationwide Permits. In August 2018, the WVDEP initiated an administrative process to revise this certification and requested public comment to, among other things, specifically revise the 72-hour limit for stream crossings noted as problematic by the Fourth Circuit as well as other conditions. The WVDEP issued a new notice and comment period for further modifications of the 401 certification. On April 24, 2019, the WVDEP submitted the modification to the United States Environmental Protection Agency (the EPA) for approval (since the WVDEP is also required to obtain the EPA's agreement to the modified 401 certification) and provided notice to the U.S. Army Corps. Assuming that the WVDEP's administrative process results in the clarification or elimination of any problematic conditions, and the EPA's agreement is secured, the MVP Joint Venture anticipates that it will once again secure from the U.S. Army Corps Districts within West Virginia verification that its activities, including stream crossings, may proceed under Nationwide Permit 12 as re-certified by the WVDEP. The MVP Joint Venture is targeting reverification to occur during the third quarter of 2019. However, the MVP Joint Venture cannot guarantee that WVDEP's action will not be challenged or that the EPA or the U.S. Army Corps Districts will act promptly or be deemed to have acted properly if challenged, in which case reverification may be delayed past the third quarter of 2019.
|
•
|
Sierra Club, et al. v. U.S. Army Corps of Engineers et al., Case No. 18-1713, Fourth Circuit Court of Appeals. In June 2018, the Sierra Club filed a second petition in the Fourth Circuit against the U.S. Army Corps, seeking review and a stay of the U.S. Army Corps Norfolk District's decision to verify the MVP Joint Venture's use of Nationwide Permit 12 for stream crossings in Virginia. The Fourth Circuit denied the Sierra Club's request for a stay on August 28, 2018. On October 5, 2018, the U.S. Army Corps' Norfolk District suspended its verification under Nationwide Permit 12 for stream crossings in Virginia pending the resolution of the West Virginia proceedings outlined above. On December 10, 2018, the U.S. Army Corps filed a motion to place the case in abeyance which the court granted on January 9, 2019. Until the U.S. Army Corps lifts its suspension, the MVP Joint Venture cannot perform any construction activities in any streams and wetlands in Virginia.
|
•
|
Sierra Club, et al. v. U.S. Forest Service, et al., consolidated under Case No. 17-2399, Fourth Circuit Court of Appeals. In a different Fourth Circuit appeal filed in December 2017, the Sierra Club challenged a Bureau of Land Management (BLM) decision to grant a right-of-way to the MVP Joint Venture and a U.S. Forest Service (USFS) decision to amend its management plan to accommodate MVP, both of which affect the MVP's 3.6-mile segment in the Jefferson National Forest in Virginia. On July 27, 2018, agreeing in part with the Sierra Club, the Fourth Circuit vacated the BLM and USFS decisions, finding fault with the USFS' analysis of erosion and sedimentation effects and the BLM's analysis of the practicality of alternate routes. On August 3, 2018, citing the court's vacatur and remand, the FERC issued a stop work order for the entire pipeline pending the agency actions on remand. The FERC modified its stop work order on August 29, 2018 to allow work to continue on all but approximately 25 miles of the project. The MVP Joint Venture has resumed construction of those portions of the pipeline. On October 10, 2018, the Fourth Circuit granted a petition for rehearing filed by the MVP Joint Venture for the limited purpose of clarifying that the July 27, 2018, order did not vacate the portion of the BLM's Record of Decision authorizing a right-of-way and temporary use permit for MVP to cross the Weston and Gauley Bridge Turnpike Trail in Braxton County, West Virginia. On October 15, 2018, the MVP Joint Venture filed with the FERC a request to further modify the August 3, 2018 stop work order to allow the MVP Joint Venture to complete the bore and install the pipeline under the Weston and Gauley Bridge Turnpike Trail. On October 24, 2018, the FERC granted the MVP Joint Venture's request to further modify the stop work order and authorize construction. The MVP Joint Venture has resumed construction of those portions of the pipeline. However, work on the 3.6-mile segment in the Jefferson National Forest must await a revised authorization, which the MVP Joint Venture is working to obtain.
|
•
|
Challenges to FERC Certificate, Court of Appeals for the District of Columbia Circuit (DC Circuit). Multiple parties have sought judicial review of the FERC's order issuing a certificate of convenience and necessity to the MVP Joint Venture and/or the exercise by the MVP Joint Venture of eminent domain authority. There are multiple consolidated petitions before the DC Circuit seeking direct review of the FERC order under the Natural Gas Act in Appalachian Voices, et al. v. FERC, et al., consolidated under Case No. 17-1271. Those petitioners requested a stay of the FERC's
|
•
|
Mountain Valley Pipeline, LLC v. 6.56 Acres of Land et al., Case No. 18-1159, Fourth Circuit Court of Appeals. Several landowners have filed challenges in various U.S. District Courts to the condemnation proceedings by which the MVP Joint Venture obtained access to their property. In each case, the district court found that the MVP Joint Venture was entitled to immediate possession of the easements, and the landowners appealed to the Fourth Circuit. The Fourth Circuit consolidated these cases and held oral argument in September 2018. On February 5, 2019, the Fourth Circuit issued an opinion affirming the decisions of the U.S. District Courts granting the MVP Joint Venture immediate access for construction of the pipeline. On March 15, 2019, the Fourth Circuit issued another opinion finding that the MVP Joint Venture did not have to condemn the interest of coal owners, nor are coal owners entitled to assert claims in the condemnation proceedings for lost coal on tracts for which they do not own a surface interest being condemned. On July 3, 2019, a group of landowners filed a writ of certiorari with the United States Supreme Court related to the Fourth Circuit’s ruling on immediate access. The MVP Joint Venture anticipates that the Supreme Court will issue its determination to accept or reject the case during the fourth quarter of 2019.
|
•
|
Greenbrier River Watershed Ass’n v. WVDEP, Circuit Court of Summers County, West Virginia. In August 2017, the Greenbrier River Watershed Association appealed the MVP Joint Venture's Natural Stream Preservation Act Permit obtained from the West Virginia Environmental Quality Board (WVEQB) for the Greenbrier River crossing. Petitioners alleged that the issuance of the permit failed to comply with West Virginia's Water Quality Standards for turbidity and sedimentation. WVEQB dismissed the appeal in June 2018. In July 2018, the Greenbrier River Watershed Association appealed the decision to the Circuit Court of Summers County, asking the court to remand the permit with instructions to impose state-designated construction windows and pre- and post-construction monitoring requirements as well as a reversal of the WVEQB's decision that the permit was lawful. On September 18, 2018, the Circuit Court granted a stay. A hearing on the merits was held on October 23, 2018. The court has not yet issued a decision. In the event of an adverse decision, the MVP Joint Venture would appeal or work with the WVDEP to attempt to resolve the issues identified by the court.
|
•
|
WVDEP Consent Order. On March 19, 2019, the WVDEP issued 26 NOVs to the MVP Joint Venture for various construction and sediment and erosion control issues in 2018. MVP and WVDEP have reached a tentative settlement agreement which will be documented as an administrative consent order for the MVP Joint Venture to pay $0.3 million in penalties. The consent order is subject to a state mandated 30-day public comment period. In addition to payment of assessed penalties, the MVP Joint Venture is required to submit a corrective action plan to resolve any outstanding permit compliance matters.
|
•
|
Sierra Club et al. v. U.S. Dep’t of Interior et al., Case No. 18-1082, Fourth Circuit Court of Appeals. On August 6, 2018, the Fourth Circuit held that National Park Service (NPS) acted arbitrarily and capriciously in granting the Atlantic Coast Pipeline (ACP) a right-of-way permit across the Blue Ridge Parkway. Specifically, the Fourth Circuit found that the permit cited the wrong source of legal authority and the NPS failed to make a “threshold determination that granting the right-of-way is ‘not inconsistent with the use of such lands for parkway purposes’ and the overall National Park System to which it belongs.” Even though the MVP Joint Venture is not named in the ACP litigation, the MVP route crosses the Blue Ridge Parkway roughly midway between mileposts 246 and 247 of the pipeline route and implicates some the same deficiencies addressed by the Court. MVP elected to request that the NPS temporarily
|
•
|
Cowpasture River Preservation Association, et al. v. U.S. Forest Service, et al., Case No. 18-1144, Fourth Circuit Court of Appeals. On December 13, 2018, in an unrelated case involving the ACP, the Fourth Circuit held that the USFS, which is part of the Department of Agriculture, lacked the authority to grant rights-of-way for oil and gas pipelines to cross the Appalachian Trail. Although the MVP Joint Venture obtained its grant to cross the Appalachian Trail from the BLM, a part of the Department of Interior, the rationale of the Fourth Circuit's opinion could apply to the BLM as well. On February 25, 2019, the Fourth Circuit denied ACP’s petition for en banc rehearing. The federal government and ACP filed petitions to the United States Supreme Court on June 26, 2019 seeking judicial review of the Fourth Circuit's decision. The MVP Joint Venture anticipates that the Supreme Court will issue its determination to accept or reject the case during the fourth quarter of 2019. The MVP Joint Venture is pursuing multiple options to address the Appalachian Trail issue, including but not limited to, administrative, regulatory and legislative options.
|
•
|
Grand Jury Subpoena. On January 7, 2019, the MVP Joint Venture received a letter from the U.S. Attorney's Office for the Western District of Virginia stating that it and the EPA are investigating potential criminal and/or civil violations of the Clean Water Act and other federal statutes as they relate to the construction of the MVP. The January 7, 2019 letter requested that the MVP Joint Venture and its members, contractors, suppliers and other entities involved in the construction of the MVP preserve documents related to the MVP generated from September 1, 2018 to the present. In a telephone call on February 4, 2019, the U.S. Attorney's Office confirmed that it has opened a criminal investigation. On February 11, 2019, the MVP Joint Venture received a grand jury subpoena from the U.S. Attorney's Office for the Western District of Virginia requesting certain documents related to the MVP from August 1, 2018 to the present. The MVP Joint Venture is complying with the letter and subpoena but cannot predict whether any action will ultimately be brought by the U.S. Attorney's Office or what the outcome of such an action would be. The MVP Joint Venture began a rolling production of documents responsive to the subpoena after the U.S. Attorney’s office narrowed its subpoena inquiry to five farms in Virginia containing 20 streams or wetlands.
|
•
|
Paylor et al. v. Mountain Valley Pipeline, LLC, Case No. CL18-4874-00, Circuit Court of Henrico County. On December 7, 2018, the Virginia Department of Environmental Quality and the State Water Control Board filed a lawsuit against the MVP Joint Venture in the Circuit Court of Henrico County alleging violations of Virginia's State Water Control Law, Water Resources and Wetlands Protection Program, and Water Protection Permit Program Regulations at sites in Craig, Franklin, Giles, Montgomery and Roanoke Counties, Virginia. The MVP Joint Venture answered the suit on January 11, 2019, stating that it does not admit and will contest the allegations. The MVP Joint Venture has initiated settlement negotiations to resolve this matter. The MVP Joint Venture anticipates that a resolution could result in penalties and injunctive relief designed to assure compliance with relevant environmental laws and regulations.
|
•
|
our existing unitholders' proportionate ownership interest in us will decrease;
|
•
|
the amount of distributable cash flow on each unit may decrease;
|
•
|
the ratio of taxable income to distributions may increase;
|
•
|
the relative voting strength of each previously outstanding unit may be diminished; and
|
•
|
the market price of our common units may decline.
|
•
|
operating a larger combined organization with assets or operations that may extend into new geographic areas and lines of business;
|
•
|
integrating gathering systems and other assets, infrastructure and personnel into existing operations, including addressing any new operational focuses or regulatory programs and legacy legal, operational or regulatory challenges of acquired assets or businesses;
|
•
|
addressing the potential diversion of management’s time and attention away from our existing business to address integration or other related issues;
|
•
|
hiring, training or retaining qualified personnel to manage and operate our growing business and assets;
|
•
|
addressing the loss of customers or key employees, obtaining new customers and expanding relationships with existing customers;
|
•
|
maintaining an effective system of internal controls in compliance with the Sarbanes-Oxley Act of 2002 as well as other regulatory compliance and corporate governance matters; and
|
•
|
integrating new technology systems for financial reporting.
|
Exhibit No.
|
|
Document Description
|
|
Method of Filing
|
|
|
|
Fourth Amended and Restated Agreement of Limited Partnership of EQM Midstream Partners, LP, dated as of April 10, 2019.
|
|
Incorporated herein by reference to Exhibit 3.1 to EQM Midstream Partners, LP’s Form 8-K (#001-35574) filed on April 10, 2019.
|
|
|
|
Registration Rights Agreement, dated as of April 10, 2019, by and among EQM Midstream Partners, LP and the Purchasers party thereto. Equitrans Midstream Corporation will furnish supplementally a copy of any omitted schedule and similar attachment to the SEC upon request.
|
|
Incorporated herein by reference to Exhibit 4.1 to EQM Midstream Partners, LP’s Form 8-K (#001-35574) filed on April 10, 2019.
|
|
|
|
Amendment No. 2 to Gas Gathering Agreement for the WG-100 Gas Gathering System, dated June 1, 2019, by and among EQT Production Company and EQT Energy, LLC, on the one hand, and EQM Gathering Opco, LLC, on the other hand. Specific items in this exhibit have been redacted, as marked by [***].
|
|
Filed herewith as Exhibit 10.1.
|
|
|
|
Amendment No. 3 to Gas Gathering for Mercury, Pandora, Pluto, and Saturn Gas Gathering Systems, dated June 1, 2019, by and among EQT Production Company and EQT Energy, LLC, on the one hand, and EQM Gathering Opco, LLC, on the other hand. Specific items in this exhibit have been redacted, as marked by [***].
|
|
Filed herewith as Exhibit 10.2.
|
|
|
|
Second Amendment to Gas Gathering and Compression Agreement, dated June 1, 2019, by and among Rice Drilling B, LLC, Alpha Shale Resources, LP and RMP Partners, LP. Specific items in this exhibit have been redacted, as marked by [***].
|
|
Filed herewith as Exhibit 10.3.
|
|
|
|
Transportation Service Agreement Applicable to Firm Transportation Service Under Rate Schedule FTS, Contract No. EQTR 20242-852, dated as of September 24, 2014 and amended through April 1, 2019, by and between Equitrans, L.P. and EQT Energy, LLC.
|
|
Filed herewith as Exhibit 10.4.
|
|
|
|
Transportation Service Agreement Applicable to Firm Transportation Service Under Rate Schedule FTS, Contract No. CW2250463-1296, dated as of January 8, 2016 and amended through April 1, 2019, by and between Equitrans, L.P. and EQT Energy, LLC.
|
|
Filed herewith as Exhibit 10.5.
|
|
|
|
Rule 13(a)-14(a) Certification of Principal Executive Officer.
|
|
Filed herewith as Exhibit 31.1.
|
|
|
|
Rule 13(a)-14(a) Certification of Principal Financial Officer.
|
|
Filed herewith as Exhibit 31.2.
|
|
|
|
Section 1350 Certification of Principal Executive Officer and Principal Financial Officer.
|
|
Furnished herewith as Exhibit 32.
|
|
101
|
|
|
Inline Interactive Data File
|
|
Filed herewith as Exhibit 101.
|
104
|
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
|
Filed herewith as Exhibit 104.
|
|
EQM Midstream Partners, LP
|
||
|
(Registrant)
|
||
|
|
|
|
|
By:
|
EQGP Services, LLC, its General Partner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Kirk R. Oliver
|
|
|
|
Kirk R. Oliver
|
|
|
|
Senior Vice President and Chief Financial Officer
|
Delivery Point(s)
|
Location
|
MarkWest Mobley
|
Logansport, WV
|
|
|
|
|
|
|
Drip Liquids
Delivery Point(s)
|
Location
|
MarkWest Mobley
|
Logansport, WV
|
NOTICES & CORRESPONDENCE
|
PAYMENTS BY ELECTRONIC FUNDS TRANSFER
|
EQT Energy, LLC
625 Liberty Avenue, Suite 1700
Pittsburgh, Pa 15222-3111
Attn: [***]
Phone: [***]
Fax: [***]
Email address: [***]
|
Per invoice instructions
Bank Name: [***]
ABA/Routing Number: [***]
Account Number: [***]
Account Name: [***]
|
EQT Production Company
625 Liberty Avenue, Suite 1700
Pittsburgh, Pa 15222-3111
Attn: [***]
Phone: [***]
Fax: [***]Email address: [***]
|
INVOICES
|
EQT Energy, LLC
625 Liberty Avenue, Suite 1700
Pittsburgh, Pa 15222-3111
Attn: [***]
Phone: [***]Fax: [***]Email address: [***]
|
NOTICES & CORRESPONDENCE
|
PAYMENTS BY ELECTRONIC FUNDS TRANSFER
|
EQT Gathering, LLC
2200 Energy Dr
Canonsburg, PA 15317
Attn: [***]
Phone: [***]Fax: [***]
Email: [***]
|
Per invoice instructions
Bank Name: [***]
ABA/Routing Number: [***]
Account Number: [***]
Account Name: [***]
|
|
INVOICES
|
|
Midstream Accounting
EQT Gathering, LLC
2200 Energy Dr
Canonsburg, PA 15317
Attn: [***]
Phone: [***]
Fax: [***]Email: [***]
|
System
|
Receipt Point Meter ID
|
Receipt Point Meter Name
|
Receipt Point MDQ
Mcf / Day |
|
Mercury
|
5100016
|
Big 176 Gathering MM A Run
|
68,600
|
|
Mercury
|
5100042
|
Big 333/192 MM A Run
|
117,300*
|
|
Mercury
|
5100045
|
PNG 129 Gathering MM A Run
|
117,300
|
|
Mercury
|
5100069
|
PNG 103 MM A RUN UPGRADE
|
117,300
|
|
Mercury
|
5100070
|
PNG 103 MM B RUN UPGRADE
|
68,600
|
|
Mercury
|
5100115
|
Big 7 MM
|
68,600
|
|
Mercury
|
M5208892
|
Big 333/192 B Run
|
68,600*
|
|
Mercury
|
M5223136
|
BIG 176 Gathering MM B Run
|
117,300
|
|
Mercury
|
M5223466
|
PNG 129 Gathering MM B Run
|
117,300
|
|
Mercury
|
M5254143
|
BIG177 MM
|
117,300
|
|
Pandora
|
M5214491
|
CPT 11 MM
|
68,600
|
|
Pandora
|
M5214966
|
SMI 27 Gathering MM
|
117,300
|
|
Pandora
|
M5260005
|
WEU4 MM
|
117,300
|
|
Pandora
|
M5248857
|
SHR60 MM A RUN
|
68,600
|
|
Pandora
|
M5248860
|
SHR60 MM B RUN
|
68,600
|
|
Pluto
|
24491
|
RSM16
|
68,600
|
|
Pluto
|
24582
|
RSM110/112 Gathering Meter
|
68,600
|
|
Pluto
|
24595
|
RSM 118 Gathering MM
|
68,600
|
|
Pluto
|
24596
|
RSM 119 Gathering MM
|
68,600
|
|
Pluto
|
M5219740
|
RSM110/112 Gathering Meter
|
68,600
|
|
Pluto
|
M5234431
|
RSM 118 Gathering MM B Run
|
117,300
|
|
Saturn
|
24454
|
OXF 114, 115
|
19,600
|
|
Saturn
|
24455
|
OXF 121
|
19,600
|
|
Saturn
|
24456
|
OXF 43 and 44 MM
|
45,900
|
|
Saturn
|
24470
|
OXF 149/150/156 MM A Run
|
45,900
|
|
Saturn
|
24471
|
OXF 138 Interconnect
|
45,900
|
|
Saturn
|
24472
|
OXF 127 Interconnect
|
45,900
|
|
Saturn
|
24481
|
OX131/152/153Gathering MM
|
45,900
|
|
Saturn
|
24492
|
WEU 1&2 B Gathering Meter
|
45,900
|
|
Saturn
|
24556
|
OXF 16 MM
|
19,600
|
|
Saturn
|
24625
|
OXF 131/152/153 Gathering B Run
|
45,900
|
|
Saturn
|
5100020
|
PEN 15 Master Meter A Run
|
45,900
|
|
Saturn
|
5100048
|
PEN15 MM B RUN
|
45,900
|
|
Saturn
|
M5260002
|
PUL96 MM A RUN
|
45,900
|
|
Saturn
|
M5260004
|
PUL96 MM B RUN
|
45,900
|
|
Saturn
|
5100059
|
SMI 28 MM A Run
|
78,500
|
|
Saturn
|
5100061
|
SMI 28 MM B Run
|
45,900
|
|
Saturn
|
M5212896
|
WEU-8 Gathering MM
|
78,500
|
|
Saturn
|
M5214202
|
WEU 51 MM
|
78,500
|
|
Saturn
|
M5214970
|
WEU 6 Gathering MM A Run
|
45,900
|
|
Saturn
|
M5222001
|
OXF 149/150/156MM B Run
|
45,900
|
|
Saturn
|
M5223803
|
OXF 157-159 Gathering MM A Run
|
45,900
|
|
Saturn
|
M5223804
|
OXF 157-159 Gathering MM B Run
|
45,900
|
|
Saturn
|
M5225932
|
WEU 6 MM B Run
|
45,900
|
|
Saturn
|
M5228452
|
WEU 1-2-49 MM
|
45,900
|
|
Saturn
|
M5243558
|
OXF163 MM Gather
|
78,500
|
|
Saturn
|
M5243552
|
OXF122 MM Gather
|
78,500
|
|
Saturn
|
M5274207
|
PEN 54 - MM1
|
78,500
|
|
Saturn
|
M5274212
|
PEN 54 – MM2
|
78,500
|
System
|
Delivery Point Meter ID
|
Delivery Point Meter Name
|
|
Mercury
|
5100025
|
MarkWest Mobley 2 (High pressure)
|
|
Mercury
|
M5202956
|
Mercury to MarkWest B Run (High pressure)
|
|
Mercury
|
M5209276
|
Mercury to MW - 16" run 1 (Low pressure)
|
|
Mercury
|
M5209277
|
Mercury to MW - 16" run 2 (Low pressure)
|
|
Mercury
|
5100017
|
Mercury to 302 (Mobley bypass)
|
|
Mercury
|
M5224080
|
Mercury to H-515 (Mobley bypass)
|
|
Mercury
|
5100042/ M5208892
|
Mercury Big 333/192 MM A Run to WG-100*
|
|
Pluto
|
24490
|
Pluto to GSF-604
|
|
Saturn
|
24452
|
Pierce North to Equitrans Gathering
|
|
Saturn
|
24453
|
Leeson South to Equitrans Gathering
|
|
Saturn
|
24484
|
Saturn Discharge to WG100
|
|
Saturn
|
M5229563
|
Saturn Units 6 & 7 Discharge to WG100
|
|
Saturn
|
M5270331
|
Janus Discharge 8” USM
|
|
Pandora
|
M5236043
|
Pandora Discharge 8" USM
|
|
|
|
|
System
|
Delivery Point Meter ID
|
Delivery Point Meter Name
|
||
Mercury
|
5100093
|
MarkWest Mobley (Logansport, West Virginia)
|
|
|
Saturn
|
M5206528
|
NGLs from Saturn to WG100
|
|
|
Saturn
|
M5229478
|
Saturn CS Liquids to WG100
|
|
|
Saturn
|
M5270332
|
Janus CS Liquids to WG100
|
|
|
Pandora
|
M5236148
|
Pandora Liquid Meter
|
|
NOTICES & CORRESPONDENCE
|
PAYMENTS BY ELECTRONIC FUNDS TRANSFER
|
EQT Energy, LLC
625 Liberty Avenue, Suite 1700
Pittsburgh, Pa 15222-3111
Attn: [***]
Phone: [***]
Fax: [***] Email address: [***]
|
Per invoice instructions
Bank Name: [***]
ABA/Routing Number: [***]
Account Number: [***] Account Name: [***]
|
EQT Production Company
625 Liberty Avenue, Suite 1700
Pittsburgh, Pa 15222-3111
Attn: [***] Phone: [***] Fax: [***] Email address: [***]
|
INVOICES
|
EQT Energy, LLC
625 Liberty Avenue, Suite 1700
Pittsburgh, Pa 15222-3111
Attn: [***]
Phone: [***]
Fax: [***] Email address: [***]
|
NOTICES & CORRESPONDENCE
|
PAYMENTS BY ELECTRONIC FUNDS TRANSFER
|
EQT Gathering, LLC
2200 Energy Dr
Canonsburg, PA 15317
Attn: [***]
Phone: [***]
Fax: [***]
Email: [***]
|
Per invoice instructions
Bank Name: [***]
ABA/Routing Number: [***]
Account Number: [***]
Account Name: [***]
|
|
INVOICES
|
|
Midstream Accounting
EQT Gathering, LLC
2200 Energy Dr
Canonsburg, PA 15317
Attn: [***]
Phone: [***]
Fax: [***] Email: [***]
|
System
|
Meter ID
|
Meter Name
|
GPS Coordinates
|
MAOP
|
Min DQ
Mcf/Day |
Max DQ
Mcf/Day |
||
Mercury
|
5100016
|
Big 176 Gathering MM A Run
|
-80.55179
|
39.55602
|
1,440
|
1,900
|
68,600
|
|
Mercury
|
5100042
|
Big 333/192 MM A Run
|
-80.58099
|
39.52385
|
1,440
|
3,200
|
117,300
|
|
Mercury
|
5100045
|
PNG 129 Gathering MM A Run
|
-80.64344
|
39.55349
|
1,440
|
3,200
|
117,300
|
|
Mercury
|
5100069
|
PNG 103 MM A RUN UPGRADE
|
-80.62447
|
39.56334
|
1,440
|
3,200
|
117,300
|
|
Mercury
|
5100070
|
PNG 103 MM B RUN UPGRADE
|
-80.62447
|
39.56334
|
1,440
|
1,900
|
68,600
|
|
Mercury
|
5100115
|
Big 7 MM
|
-80.61385
|
39.57679
|
1,440
|
1,900
|
68,600
|
|
Mercury
|
M5208892
|
Big 333/192 B Run
|
-80.58099
|
39.52385
|
1,440
|
1,900
|
68,600
|
|
Mercury
|
M5223136
|
BIG 176 Gathering MM B Run
|
-80.55179
|
39.55602
|
1,440
|
3,200
|
117,300
|
|
Mercury
|
M5223466
|
PNG 129 Gathering MM B Run
|
-80.64344
|
39.55349
|
1,440
|
3,200
|
117,300
|
|
Mercury
|
M5254143
|
BIG177 MM
|
-80.5842
|
39.58225
|
1,440
|
1,900
|
117,300
|
|
Pandora
|
M5214491
|
CPT 11 MM
|
-80.72431
|
39.38134
|
1,440
|
1,900
|
68,600
|
|
Pandora
|
M5214966
|
SMI 27 Gathering MM
|
-80.7027132
|
39.3813596
|
1,440
|
3,200
|
117,300
|
|
Pandora
|
M5248857
|
SHR60 MM A RUN
|
-80.8177
|
39.38813
|
1440
|
800
|
68,600
|
|
Pandora
|
M5248860
|
SHR60 MM B RUN
|
-80.8177
|
39.38813
|
1440
|
800
|
68,600
|
|
Pandora
|
M5260005
|
WEU4 MM
|
39.36664
|
-80.82072
|
1440
|
3,200
|
117,300
|
|
Pluto
|
24491
|
RSM16
|
-80.14147
|
39.32203
|
1,440
|
1,900
|
68,600
|
|
Pluto
|
24582
|
RSM110/112 Gathering Meter
|
-80.16256
|
39.31757
|
1,440
|
1,900
|
68,600
|
|
Pluto
|
24595
|
RSM 118 Gathering MM
|
-80.18918
|
39.29457
|
1,440
|
1,900
|
68,600
|
|
Pluto
|
24596
|
RSM 119 Gathering MM
|
-80.15786
|
39.29579
|
1,440
|
1,900
|
68,600
|
|
Pluto
|
M5219740
|
RSM110/112 Gathering Meter
|
-80.16256
|
39.31757
|
1,440
|
1,900
|
68,600
|
|
Pluto
|
M5234431
|
RSM 118 Gathering MM B Run
|
-80.1892
|
39.29487
|
1440
|
1,450
|
117,300
|
|
Saturn
|
24454
|
OXF 114, 115
|
-80.80857
|
39.14277
|
720
|
600
|
19,600
|
|
Saturn
|
24455
|
OXF 121
|
-80.8068
|
39.1359
|
720
|
600
|
19,600
|
|
Saturn
|
24456
|
OXF 43 and 44 MM
|
-80.81166
|
39.14533
|
720
|
1,200
|
45,900
|
|
Saturn
|
24470
|
OXF 149/150/156 MM A Run
|
-80.78491
|
39.21018
|
720
|
1,200
|
45,900
|
|
Saturn
|
24471
|
OXF 138 Interconnect
|
-80.78468
|
39.20905
|
720
|
1,200
|
45,900
|
|
Saturn
|
24472
|
OXF 127 Interconnect
|
-80.80583
|
39.19561
|
720
|
1,200
|
45,900
|
|
Saturn
|
24481
|
OX131/152/153Gathering MM
|
-80.79538
|
39.18596
|
720
|
1,200
|
45,900
|
|
Saturn
|
24492
|
WEU 1&2 B Gathering Meter
|
-80.7872
|
39.2635
|
720
|
1,200
|
45,900
|
|
Saturn
|
24556
|
OXF 16 MM
|
-80.77924
|
39.18906
|
720
|
600
|
19,600
|
|
Saturn
|
24625
|
OXF 131/152/153 Gathering B Run
|
-80.7952
|
39.18556
|
720
|
1,200
|
45,900
|
|
Saturn
|
5100020
|
PEN 15 Master Meter A Run
|
-80.936507
|
39.2502322
|
720
|
1,200
|
45,900
|
|
Saturn
|
5100048
|
PEN15 MM B RUN
|
-80.936507
|
39.2502322
|
720
|
1,200
|
45,900
|
|
Saturn
|
5100059
|
SMI 28 MM A Run
|
-80.74666
|
39.25743
|
720
|
2,100
|
78,500
|
|
Saturn
|
5100061
|
SMI 28 MM B Run
|
-80.74666
|
39.25743
|
720
|
1,200
|
45,900
|
|
Saturn
|
M5212896
|
WEU-8 Gathering MM
|
-80.80077
|
39.27448
|
720
|
2,100
|
78,500
|
|
Saturn
|
M5214202
|
WEU 51 MM
|
-80.76367
|
39.25619
|
720
|
2,100
|
78,500
|
|
Saturn
|
M5214970
|
WEU 6 Gathering MM A Run
|
-80.75645
|
39.29037
|
720
|
1,200
|
45,900
|
|
Saturn
|
M5222001
|
OXF 149/150/156MM B Run
|
-80.78491
|
39.21018
|
720
|
1,200
|
45,900
|
|
Saturn
|
M5223803
|
OXF 157-159 Gathering MM A Run
|
-80.76716
|
39.21132
|
720
|
1,200
|
45,900
|
|
Saturn
|
M5223804
|
OXF 157-159 Gathering MM B Run
|
-80.76716
|
39.21132
|
720
|
1,200
|
45,900
|
|
Saturn
|
M5225932
|
WEU 6 MM B Run
|
-80.75645
|
39.29037
|
720
|
1,200
|
45,900
|
|
Saturn
|
M5228452
|
WEU 1-2-49 MM
|
-80.7872
|
39.2635
|
720
|
1,200
|
45,900
|
|
Saturn
|
M5243558
|
OXF163 MM Gather
|
-80.8069
|
39.13586
|
720
|
1,650
|
78,500
|
|
Saturn
|
M5243552
|
OXF122 MM Gather
|
-80.8069
|
39.13586
|
720
|
1,650
|
78,500
|
|
Saturn
|
M5260002
|
PUL96 MM A RUN
|
-80.98591
|
39.21114
|
720
|
1,200
|
45,900
|
|
Saturn
|
M5260004
|
PUL96 MM B RUN
|
-80.98591
|
39.21114
|
720
|
1,200
|
45,900
|
|
Saturn
|
M5274207
|
PEN 54 - MM1
|
-80.92757
|
39.25374
|
720
|
2,100
|
78,500
|
|
Saturn
|
M5274212
|
PEN 54 – MM2
|
-80.92757
|
39.25374
|
720
|
2,100
|
78,500
|
By:
|
ALPHA SHALE HOLDINGS LLC, its General Partner
|
By:
|
EQM MIDSTREAM MANAGEMENT, LLC, its General Partner
|
System Name
|
Deliver Point Name
|
Downstream Pipeline
|
In-Service Date
|
Maximum Daily Quantity (Dth/Day)
|
Mojo
|
Mojo
|
TCO
|
Effective Date
|
[***]
|
|
|
|
|
|
Denex
|
California
|
DTI
|
Effective Date
|
[***]
|
|
Maverick
|
M3
|
Effective Date
|
[***]
|
|
Tombstone
|
TETCO
|
Effective Date
|
[***]
|
|
Jaybird
|
ETRN - H148
|
Effective Date
|
[***]
|
|
Brova
|
ETRN - M78
|
Effective Date
|
[***]
|
|
Kryptonite
|
TCO
|
Effective Date
|
[***]
|
|
|
|
|
|
ASR/Whipkey
|
Steinmiller
|
DTI
|
Effective Date
|
[***]
|
|
Tau
|
TCO
|
Effective Date
|
[***]
|
|
Upsilon
|
TCO
|
Effective Date
|
[***]
|
|
Rawhide
|
TETCO
|
Effective Date
|
[***]
|
|
|
|
|
|
|
|
|
|
|
Leather Jacket
|
Cygrymus
|
DTI
|
Effective Date
|
[***]
|
|
|
|
|
|
Windridge
|
Windridge
|
TETCO
|
Effective Date
|
[***]
|
|
|
|
|
|
Blue Jacket
|
Rogersville
|
TETCO
|
Effective Date
|
[***]
|
|
|
|
|
|
Yellow Jacket
|
Waynesburg
|
TETCO
|
Effective Date
|
[***]
|
|
|
|
|
|
Beta
|
Bambino
|
TETCO
|
2018
|
[***]
|
|
|
|
|
|
Throckmorton
|
Throckmorton
|
DTI
|
Effective Date
|
[***]
|
Throckmorton
|
|
Hammerhead
|
1/1/2020
|
[***]
|
CUSTOMER:
|
|
EQUITRANS, L.P.:
|
By /s/ Paul Kress 9/30/2014 |
|
By /s/ Andrew. L. Murphy 9/30/2014
|
|
|
|
Title Vice President |
|
Title Vice President |
|
|
|
|
|
|
|
Base MDQ (Dth)
|
|
Winter MDQ (Dth)
|
|
Effective Date
|
|
1,035,000
|
|
1,035,000
|
|
12/01/2017
|
|
630,000
|
|
630,000
|
|
07/01/2023
|
|
325,000
|
|
325,000
|
|
09/01/2023
|
|
30,000
|
|
30,000
|
|
10/01/2024
|
Primary Delivery Point(s)
|
|
Base
|
|
Winter
|
Effective
|
(Meter No. and/or Meter Name)
|
|
MDQ Allocation
|
|
MDQ Allocation
|
Date
|
|
|
|
|
|
|
18120 – TETCO Braden Run
|
|
180,000 dth
|
|
180,000 dth
|
12/1/2017
|
73705 – TETCO Morris II
|
|
225, 000 dth
|
|
225,000 dth
|
12/1/2017
|
73713 - TETCO Jefferson
|
|
550, 000 dth
|
|
550,000 dth
|
12/1/2017
|
11027 - DTI Pratt II
|
|
30,000 dth
|
|
30,000 dth
|
12/1/2017
|
24438 – TCO Pickenpaw
|
50,000 dth
|
50,000 dth
|
12/1/2017
|
||
|
|
|
|
|
|
|
|
|
|
|
|
73713 - TETCO Jefferson
|
|
550, 000 dth
|
|
550, 000 dth
|
7/1/2023
|
18120 – TETCO Braden Run
|
|
0 dth
|
|
0 dth
|
7/1/2023
|
73705 – TETCO Morris II
|
|
0 dth
|
|
0 dth
|
7/1/2023
|
11027 - DTI Pratt II
|
|
30,000 dth
|
|
30,000 dth
|
7/1/2023
|
24438 – TCO Pickenpaw
|
50,000 dth
|
50,000 dth
|
7/1/2023
|
||
|
|
|
|
|
|
|
|
|
|
|
|
73713 - TETCO Jefferson
|
|
245, 000 dth
|
|
245, 000 dth
|
9/1/2023
|
11027 - DTI Pratt II
|
|
30,000 dth
|
|
30,000 dth
|
9/1/2023
|
24438 – TCO Pickenpaw
|
50,000 dth
|
50,000 dth
|
9/1/2023
|
||
|
|
|
|
|
|
|
|
|
|
|
|
11027 - DTI Pratt II
|
|
30,000 dth
|
|
30,000 dth
|
10/1/2024
|
CUSTOMER:
|
|
EQUITRANS, L.P.:
|
By /s/ Paul Kress 11/29/2017 |
|
By Jeremiah J. Ashcroft 11/29/2017
|
|
|
|
Title Vice President |
|
Title President |
|
|
|
|
|
|
1.
|
In accordance with Section 6.30 of the General Terms and Conditions of Equitrans’ Tariff, Equitrans and Customer agree that the following negotiated rate provisions will apply under the Agreement:
|
CUSTOMER:
|
|
EQUITRANS, L.P.:
|
By /s/ Donald M. Jenkins 3/20/2019 |
|
By Cliff Baker 3/26/2019
|
|
|
|
Title President |
|
Title SVP Commercial Dev. & Ops |
___
|
This Agreement supersedes, terminates, and cancels Contract No. _____, dated _____________. The superseded contract is no longer in effect.
|
6.
|
The Receipt and Delivery Points are stated in Exhibit A to this Agreement.
|
CUSTOMER:
|
|
EQUITRANS, L.P.:
|
By /s/ Paul Kress 1/8/2016
|
|
By /s/ David Gray 1/8/2016
|
Title Vice President
|
|
Title Senior Vice President
|
|
X
|
|
Mainline System (includes the Sunrise Transmission System and the Ohio
|
|
|
|
Valley Connector)
|
|
|
|
|
|
|
|
Allegheny Valley Connector
|
|
|
|
|
|
Base MDQ (Dth)
|
|
Winter MDQ (Dth)
|
|
Effective Date
|
|
650000
|
|
650000
|
|
12/1/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Primary Delivery Point(s)
|
|
Base
|
|
Winter
|
Effective
|
(Meter No. and/or Meter Name)
|
|
MDQ Allocation
|
|
MDQ Allocation
|
Date
|
60062 – REX Clarington
|
|
500,000 Dth
|
|
500,000 Dth
|
12/1/2018
|
70007D – Rover Traveler
|
|
150,000 Dth
|
|
150,000 Dth
|
12/1/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
CUSTOMER:
|
|
EQUITRANS, L.P.:
|
By /s/ Donald M. Jenkins 11/30/2018 |
|
By /s/ Paul Kress 11/30/2018
|
Title President |
|
Title Vice President |
|
|
|
|
|
|
CUSTOMER:
|
|
EQUITRANS, L.P.:
|
By /s/ Donald M. Jenkins 3/20/2019 |
|
By /s/ Cliff Baker 3/26/2019
|
Title President |
|
Title SVP Commercial Dev. & Ops |
|
|
|
|
|
|
|
EQM Midstream Partners, LP
|
|
|
|
/s/ THOMAS F. KARAM
|
|
Thomas F. Karam
|
|
Chief Executive Officer, EQGP Services, LLC, the registrant’s General Partner
|
|
EQM Midstream Partners, LP
|
|
|
|
/s/ KIRK R. OLIVER
|
|
Kirk R. Oliver
|
|
Senior Vice President and Chief Financial Officer, EQGP Services, LLC, the registrant’s General Partner
|
/s/ THOMAS F. KARAM
|
|
|
July 30, 2019
|
Thomas F. Karam
Chief Executive Officer, EQGP Services, LLC, EQM’s General Partner
|
|
|
|
|
|
|
|
|
|
|
|
/s/ KIRK R. OLIVER
|
|
|
July 30, 2019
|
Kirk R. Oliver
Senior Vice President and Chief Financial Officer, EQGP Services, LLC, EQM’s General Partner
|
|
|