CompanyGraph
EQT Corporation
EQT · NYSE Arca · United States
Moves Marcellus and Utica shale gas through owned pipelines to Eastern US markets, earning money from both selling gas and charging others to use the pipes.
EQT Corporation drills for natural gas in the Marcellus and Utica shale formations in Appalachia and then moves that gas through its own gathering pipes directly to Transco and Texas Eastern, the two main interstate pipelines that carry gas to buyers in the Northeast and Southeast. Because EQT built those gathering connections alongside its wellheads, its gas reaches premium markets without competing for the scarce capacity slots that strand other Appalachian producers inside the basin during peak winter demand — and third-party producers whose acreage touches the same network have to pay EQT access fees to use that same exit path, which layers a midstream fee income on top of commodity sales. Utility customers who sign long-term contracts get both the gas supply and a reserved spot on the gathering system bundled into one agreement, so switching suppliers means untangling the commodity deal and the transportation arrangement simultaneously while also figuring out how to physically reroute wellhead connections that are already in the ground. The whole structure depends on those specific Transco and Texas Eastern delivery points staying open — if federal permitting authorities curtailed capacity at those interconnects, gathered gas would have nowhere to go and both the commodity margins and the third-party fees would collapse at once.
How does this company make money?
The company earns money two ways. First, it sells natural gas at Henry Hub and regional market prices, minus the cost of moving it to those markets. Second, it charges third-party producers a fee to gather and process their gas through the proprietary pipeline network. These two revenue streams — commodity sales and infrastructure service fees — run in parallel and both depend on the same physical pipes.
What makes this company hard to replace?
Utility customers sign long-term contracts that bundle the gas supply and a dedicated reservation on the gathering pipeline into a single agreement. Leaving means renegotiating both the commodity deal and the transportation arrangement at the same time, which is slow and complicated. For any acreage a customer operates that connects to this company's gathering system, the wellhead pipes are already physically in place, so switching also means arranging an entirely different way to move the gas out.
What limits this company?
The physical ceiling is the amount of gas that Transco and Texas Eastern can accept at their Appalachian connection points. During winter when demand peaks, those slots fill up. No amount of extra drilling or new gathering pipes solves that — if the exit points are full, the gas has nowhere to go.
What does this company depend on?
The company cannot operate without drilling permits from Pennsylvania and West Virginia regulators, interstate pipeline access at Transco and Texas Eastern delivery points, hydraulic fracturing sand and completion chemicals to stimulate wells, water withdrawal permits for drilling and completion operations, and specialized horizontal drilling rigs capable of building long lateral wells.
Who depends on this company?
Northeast regulated utilities rely on this gas to heat homes during winter — a supply disruption would leave residential customers short during peak cold. LNG export facilities on the Gulf Coast depend on Appalachian supply, and if volumes fell they would have to buy higher-cost gas from the Permian instead. Eastern US power plants that run on natural gas during periods of high electricity demand depend on reliable pipeline delivery to keep the grid stable.
How does this company scale?
Drilling more horizontal wells in existing Marcellus and Utica acreage is relatively cheap because the gathering pipes and interstate connections are already there — new wells simply plug into infrastructure that is already built. Growing beyond the current Appalachian footprint is a different problem: it requires building entirely new gathering systems, processing facilities, and pipeline connections, none of which can be achieved through efficiency improvements alone.
What external forces can significantly affect this company?
Federal and state methane emissions rules require the company to run costly leak detection and repair programs across its wellheads and gathering pipes. Northeast states pushing renewable energy mandates could shrink long-term demand for natural gas in power generation. Growing LNG export capacity on the Gulf Coast is pulling more gas away from traditional Eastern US buyers, which shifts supply patterns the company has to plan around.
Where is this company structurally vulnerable?
Federal pipeline regulators could block new or expanded capacity at the Transco and Texas Eastern connection points. If that happened, gas gathered inside the Appalachian Basin would have no way out to premium markets. The pricing advantage that makes both gas sales and third-party gathering fees profitable would disappear at the same time.