Eureka Midstream Preparing For Growth

CHICAGO – (Energy & Mining International) – Volume 16, Issue 1 — Authored by Kat Zeman – Eureka Midstream’s reconstructed ownership and pipeline interconnect project position it for growth.

A well-positioned midstream operator in U.S. shale plays, Eureka Midstream is preparing for growth. The Houston-based company owns and operates more than 205 miles of gas-gathering systems and 15 interconnects in the Ohio River Valley. It is under new ownership and in the process of developing four new pipeline interconnections.

Known as The Southern Hub Project, development started in fall 2017 and is targeted for completion in 2019. It will allow Eureka Midstream to enter new markets.

“Along with the current markets that enable takeaway to the Northeast, Michigan and mid-continent, the new interconnects will provide our producers with access to the mid-Atlantic and Southeast markets,” explains Marc Weaver, senior vice president. “In addition to our focus on service, I think the number of downstream markets is one of the things that makes us attractive to our producers.”

Eureka Midstream also reconstructed its ownership last year. SK Holdings Co. Ltd., a South Korean-based, $60 billion company involved in natural gas distribution, acquired ownership in Eureka Midstream, which it shares with Morgan Stanley Infrastructure Partners. “We are its first midstream investment in the United States,” Weaver explains, referring to SK Holdings. “This is really good for us from a growth perspective.”

INCREASING CREDIT
In addition to a new investor and additional pipeline interconnects, Eureka Midstream obtained a $400 million senior secured revolving credit facility last year. The credit facility amends and restates Eureka’s existing credit facility. It increases the aggregate credit facility commitments from $225 million to $400 million with an extended mature date of four years from the credit facility closing date.

Proceeds from the credit facility can be used for funding capital expenditures, financing permitted acquisitions, funding working capital and general corporate purposes. “We think our new ownership structure is very strong with access to the $400 million credit facility,” Weaver says. “Both have really strengthened our balance sheet and positioned us for growth.”

ACCESS TO DOWNSTREAM
Eureka Midstream’s gas gathering systems are located in core areas of the Utica Shale southwest Marcellus Shale plays. The company prides itself on its ability to serve dry and wet gas production from its multiline system.

In addition, the company believes it offers opportunities to its producers that its competitors can’t. “There are things we have that other midstream companies our size don’t and that’s access to multiple downstream markets,” Weaver says. “We have 15 interconnects with varied downstream markets. It’s very unusual for someone our size to have that many downstream pipeline interconnects. That’s very attractive for our producers because they have the option to go into many different markets.”

Eureka Midstream believes it is positioned for continued success in the highest-growth natural gas basin in North America. No single producer controls more than 26 percent of total throughput volumes there.

More than 35 percent of Eureka Midstream’s revenues are generated under long-term, fixed-fee and fixed-spread natural gas gathering and  sales agreements. They are intended to mitigate the company’s direct commodity price exposure and enhance the stability of cash flows.

Eureka Midstream plans to continue focusing on long-term, fixed-fee contracts as the operation explores new growth opportunities.

On April 10, 2019, EQM Midstream Partners, LP (NYSE: EQM), a subsidiary of Equitrans Midstream Corporation (NYSE: ETRN), closed the transaction to acquire a 60% interest in Eureka Midstream Holdings, LLC (Eureka Midstream) and a 100% interest in Hornet Midstream Holdings, LLC (Hornet Midstream).

As integration activities begin, keeping safety our number one priority and ensuring business continuity will be of utmost importance. During the transition process, there are often questions that arise from our various stakeholders – please use the information below to receive assistance:

Emergency Contact:  During the transition period, all emergency calls will continue to utilize Eureka’s Gas Control at (800) 269-6673. Additional emergency contact information will be provided once the transition is complete.

Customers:  During the transition period, current Eureka Midstream customers may continue to visit Eureka’s Customer Activities website to place nominations and view notices.

Property Owners (Landowners): Any questions or concerns regarding your Eureka Midstream right-of-way agreement or land lease may be directed via email to OwnerRelations@equitransmidstream.com. Additionally, please feel free to visit the ETRN Owner Relations website for a listing of frequently asked questions.

Vendors/Suppliers: For additional information regarding procurement services or questions regarding existing contracts, please email SupplyChainContracts@equitransmidstream.com. 

Business Development Inquiries: Please email Paul Kress or call 412-395-3232. 

Media Inquiries: For acquisition-related and/or general media inquiries, please email Natalie Cox.

General and Community Inquiries: Please direct your inquiry via email to info@equitransmidstream.com

Investor Inquiries: Visit the Investors page on our respective ETRN or EQM websites for contact information, investor presentations, earnings releases, and SEC filings.

About Equitrans Midstream Corporation

Equitrans Midstream Corporation (ETRN) has a premier asset footprint in the Appalachian Basin and is one of the largest natural gas gatherers in the United States. With a rich 135-year history in the energy industry, ETRN was launched as a standalone company in 2018 and, through its subsidiaries, has an operational focus on gas gathering systems, transmission and storage systems, and water services assets that support natural gas producers across the Basin. ETRN is helping to meet America’s growing need for clean-burning energy, while also providing a rewarding workplace and enriching the communities where its employees live and work. ETRN owns the non-economic general partner interest and an approximate 60% limited partner interest in EQM.

For more information on Equitrans Midstream Corporation, visit www.equitransmidstream.com

About EQM Midstream Partners

EQM Midstream Partners, LP (EQM) is a growth-oriented limited partnership formed to own, operate, acquire, and develop midstream assets in the Appalachian Basin. As one of the largest gatherers of natural gas in the United States, EQM provides midstream services to producers, utilities, and other customers through its strategically located natural gas transmission, storage, and gathering systems, and water services to support energy development and production in the Marcellus and Utica regions. EQM owns approximately 950 miles of FERC-regulated interstate pipelines and approximately 2,200 miles of high- and low-pressure gathering lines.

For more information on EQM Midstream Partners, LP, visit www.eqm-midstreampartners.com