Blackstone Group (BX.US) is set to acquire a minority stake in EQT Corporation's (EQT.US) interstate natural gas pipeline for $3.5 billion.

Private equity firm Blackstone Group (BX.US) is in advanced talks to buy a minority stake in EQT Corp's (EQT.US) interstate natural gas pipelines for about $3.5 billion, according to people familiar with the matter. If the deal goes through, it would help EQT reduce the debt it took on when it acquired pipeline operator Equitrans Midstream earlier this year. Blackstone plans to invest through its credit and insurance units, the people said. A deal is expected to be signed in the coming weeks, and EQT will continue to operate the pipelines, the people said. The deal would help Blackstone get stable income that can be used for its various investment strategies, while also giving it exposure to energy infrastructure assets, including the controversial Mountain Valley Pipeline, a 300-mile natural gas pipeline that runs from West Virginia to Virginia. Mountain Valley Pipeline, which has been under construction for years amid legal battles, began operations in June. EQT's stake in the pipeline entity is one of the largest assets in the portfolio being sold. EQT held a 940-mile stake in interstate pipelines with a daily natural gas capacity of 4.4 billion cubic feet, according to its March report. EQT said in July that its pipeline portfolio generated nearly $700 million in adjusted Ebitda. The deal with Equitrans helped EQT transform from an exploration and production company to a full-service natural gas supplier. However, the deal saddled EQT with nearly $14 billion in debt. In July, the company said it planned to cut $5 billion in debt through operating cash and asset sales. EQT has agreed to sell $1.1 billion in assets to Equinor and said at the time it planned to sell a minority stake in its pipelines. Blackstone is no stranger to energy infrastructure. Its current portfolio includes Tallgrass Energy, a pipeline operator, and a stake in the Elba Island liquefied natural gas (LNG) facility. Blackstone currently manages over $1 trillion in assets and in September 2023 announced it would merge its credit and insurance units into one as part of its efforts to strengthen returns and the value of its managed assets.