Private equity firm Blackstone is in advanced negotiations to acquire minority stakes in natural gas producer EQT’s US interstate natural gas pipelines for an estimated $3.5bn, Reuters has reported.

The strategic move could assist the natural gas producer in reducing its debt, which escalated following its purchase of Equitrans Midstream, a pipeline operator, in 2024.

Citing sources who wished to remain anonymous due to the confidential nature of the discussions, Reuters stated that the investment will be channelled through Blackstone's credit and insurance division.

A deal could be finalised in November/December 2024, provided the ongoing talks do not fall apart.

EQT will maintain operational control over the pipelines post-deal.

This arrangement would enable Blackstone to earn a steady income, which could be reinvested across its diverse investment strategies, and provide Blackstone with valuable exposure to energy infrastructure assets such as the Mountain Valley Pipeline.

The Mountain Valley Pipeline, a 300-mile (482.8km) natural gas conduit extending from West Virginia to Virginia, commenced operations in June 2024 after prolonged legal disputes.

A portion of EQT's interest in the entity owning the Mountain Valley Pipeline is among the most prominent assets included in the current sale.

EQT and Blackstone have not commented on the matter.

EQT has interests in 940 miles (1,512.8km) of interstate pipelines with the capability to transport 4.4 billion cubic feet per day of natural gas.

In July 2024, EQT reported that its pipeline portfolio had generated close to $700m of adjusted earnings before interest, tax, depreciation and amortisation.

The transaction with Equitrans marked EQT's transition from an exploration and production entity to a fully integrated natural gas provider, at the cost of accruing $14bn in debt.

EQT had previously announced intentions to reduce its debt by $5bn through operational cash flow and asset sales. The company, which agreed in July to sell assets valued at $1.1bn to Equinor, indicated plans to divest minority stakes in its pipelines.

Blackstone, familiar with energy infrastructure through its holdings such as Tallgrass Energy and an interest in the Elba Island LNG facility's controlling company, manages more than $1tn in assets.