EQT Corporation's Homer City Deal: A Pivotal Play in the Energy-Tech Convergence

The $2.5 billion Homer City Energy Campus project in Pennsylvania has emerged as a landmark in the U.S. energy transition, and at its core is EQT Corporation's historic agreement to supply 665,000 million British thermal units (MMBTUs) of natural gas per day—a volume unmatched in North American single-site transactions. This partnership, announced in July 2025, is not merely a gas deal but a strategic pivot that positions EQT as a linchpin in the convergence of energy infrastructure and the booming AI/data center sector. For investors, the Homer City project represents a rare opportunity to bet on a company uniquely leveraged to profit from the twin trends of digitalization and decarbonization.

The Gas Transaction: A Blueprint for Long-Term Contracts

The 665,000 MMBTU/day agreement sets a new standard for natural gas supply deals. Unlike short-term commodity trades, this contract ensures EQT will serve as the exclusive provider for a 4.4 gigawatt facility powering a 3,200-acre AI/data center complex—replacing a former coal plant with clean energy infrastructure. The redundancy of dual pipelines (Texas Eastern Transmission and Eastern Gas Transmission) underscores EQT's ability to deliver uninterrupted supply, a critical factor for high-performance computing (HPC) operations that cannot afford downtime.

While the contract's duration remains undisclosed, its scale and strategic importance suggest it is a multi-decade commitment. The project's 2027 operational start and the 2026 turbine delivery timeline (supplied by GE Vernova) imply sustained demand. For investors, this signals EQT's capacity to lock in high-margin, long-term contracts—a stark contrast to volatile spot-market pricing.

Pennsylvania's Energy Transition Leadership

The Homer City project epitomizes Pennsylvania's shift from coal to gas and digital infrastructure. By repurposing the former largest coal plant in the state, the campus reduces carbon emissions by up to 40% while meeting surging demand for energy-intensive AI applications. This aligns with Governor Josh Shapiro's goals to modernize the grid and position Pennsylvania as a data hub—a vision supported by $1.7 billion in state grants for energy innovation since 2021.

EQT's role here is dual: it supplies the gas and benefits from in-basin demand. Unlike gas shipped to distant markets, Homer City's needs are met locally, reducing transportation costs and boosting profit margins. This model—producing gas where it's consumed—is EQT's strategic edge.

EQT's Financial and Operational Strength

EQT's recent performance underscores its reliability for such massive projects. With 39% revenue growth over 12 months and a 68% profit margin (as of Q2 2025), the company is financially primed to deliver. Its debt-to-EBITDA ratio of 3.5x is moderate, leaving room for reinvestment. Analysts at Jefferies and UBS have raised price targets to $70 and $64, respectively, citing Homer City and the Shippingport Power Station deal (800 MMcf/day) as catalysts for EBITDA growth.

Why Investors Should Act Now: The Energy-Tech Nexus

The Homer City deal is more than a gas supply contract—it's a template for the future of energy infrastructure. As AI and HPC data centers proliferate, they will require reliable, on-site power generation. EQT's expertise in securing long-term gas supply for these high-capacity facilities positions it as a first-mover in a sector projected to grow at 12% annually through 2030.

Investors should note three key advantages:
1. Scalability: The Homer City model can be replicated for other decommissioned coal plants, creating recurring revenue streams.
2. Regulatory Tailwinds: Pennsylvania's clean energy incentives and federal infrastructure grants favor projects like this.
3. Dividend Safety: EQT's 2.1% yield is bolstered by its diversified cash flows, making it resilient to gas price fluctuations.

Risks and Considerations

While EQT's position is strong, risks persist. Delays in turbine deliveries (GE Vernova's 7HA.02 models) or pipeline permitting could pressure margins. Additionally, if the AI/data center boom slows, demand for Homer City's services might lag. However, with AI spending expected to hit $300 billion globally by 2028, the tailwinds are robust.

Conclusion: EQT as the Bridge Between Energy and Tech

EQT Corporation's Homer City agreement is a masterstroke. It locks in a decades-long revenue stream, establishes EQT as a partner of choice for next-gen infrastructure, and capitalizes on Pennsylvania's energy transition leadership. For investors, this is a high-conviction buy—a stock poised to benefit from both rising gas demand and the digital revolution. With a P/E ratio of 12x forward earnings (below its five-year average), EQT offers a rare blend of growth and value in an increasingly tech-driven energy landscape.

Investment Thesis:
- Buy: Target price $70 (Jefferies) with upside to $75.
- Hold: If gas price volatility exceeds expectations.
- Avoid: Only if AI adoption falters or regulatory hurdles emerge.

EQT's Homer City deal is not just a gas contract—it's a blueprint for the future. For investors ready to capitalize on the energy-tech convergence, this is the play to watch.