To say 2012 is shaping up to be an exciting year for EQT Midstream Partners LP, and its parent company, EQT Corp., would be an understatement. In June, EQT Midstream Partners LP launched the first initial public offering (IPO) since Facebook's IPO disaster. While the social media monster disappointed investors, EQT did just the opposite. It sold 12.5 million common units at $21 each, raising $262.5 million.

Meantime, EQT Midstream is continuing to experience tremendous expansion, with $350 million in organic growth projects under way this year. Of course, it's counting on its investments to pay off in a big way. It expects to have increased its Marcellus capacity by about 60% within the next year.

Leading the charge is Randy Crawford, senior vice president and president of midstream, distribution and commercial. Crawford is responsible for executing an aggressive growth strategy for EQT's natural gas midstream, distribution and production marketing companies operating in the rapidly growing Marcellus natural gas supply region. Before joining EQT, Crawford held various financial and managerial positions with Consolidated Natural Gas Co. in Pittsburgh. Crawford, a certified public accountant, began his career at Price Waterhouse Utility Services Practice.

As well, Crawford serves as a director for the American Gas Association, the Energy Association of Pennsylvania, the West Virginia Oil and Natural Gas Association and the Interstate Natural Gas Association of America.

MIDSTREAM When did EQT finally decide to launch the IPO, what were the driving factors for that, and was it as well received as you expected?

CRAWFORD After a thorough evaluation of our alternatives, we did decide to pursue the master limited parntership. We announced plans to file an S-1 registration with the Federal Trade Commission on December 8, 2011. The simple answer behind our decision was that it was the right financing approach for our midstream assets and was the perfect fit related to our strategic objective to accelerate the growth opportunity we see in the Marcellus. The MLP space is a deep market that provides a repeatable and low-cost (relative to the alternatives) capital source. It became clear to us during our corporate evolution that we needed a funding source to capture the significant midstream opportunity we had in the Marcellus region. This source of capital enables us to fully leverage EQT's assets—our pipelines and capabilities—as we continue to see a huge opportunity to build out a vibrant and growing midstream business. The MLP, in our judgment, is the best way to make this happen. In addition, the need to control the when, where and how midstream infrastructure gets built is also of extreme importance and value to EQT.

MIDSTREAM Were you able to ring the opening bell?

CRAWFORD (Laughs) Yes, I rang the opening bell. It was my first time being at the New York Stock Exchange, and it was a very good experience. The result of the offering was even better than we expected. The IPO priced at the top end of the expected range ($21), opened on the New York Stock exchange up 9.5% and made more gains as the day went on. Additionally, the underwriters took the full over-allotment of 1,875,000 units. Given that EQT Midstream Partners was the "ice breaker" just after Facebook, we were quite proud of our decision and the results.

MIDSTREAM What assets do you have in the Marcellus?

CRAWFORD A lot. It's quite an opportunity. EQT Midstream is one of the largest and fastest- growing pipelines in the Marcellus. Our high-quality asset base sits right on top of the Marcellus formation in western Pennsylvania and northwestern Virginia. The cornerstone of these assets is Equitrans, our FERC [Federal Energy Regulatory Commission]-regulated interstate pipeline (EQM). While originally built to import gas to the Pittsburgh region, we have re-engineered it to export Marcellus gas from our high-pressure gathering systems to local markets and five interstate pipelines. In total, the midstream group operates more than 11,000 miles of pipe and has more than 260,000 horsepower of compression.

MIDSTREAM What are you building now?

CRAWFORD The infrastructure build-out is primarily focused around providing needed infrastructure to support the rapid growth in the Marcellus. We have more than $350 million of organic growth projects underway this year. The bulk of these projects leverage our existing asset base. This includes extensions of our high-pressure gathering systems, the addition of compression, the paralleling of our transmission system and construction of inner-connects that really provide additional market outlets for our customers. By year end, we expect to have expanded our Marcellus capacity to more than 1 billion cubic feet per day, which is an increase of approximately 60%.

MIDSTREAM What are the challenges to that build-out, and how will you overcome them?

CRAWFORD One of the many challenges we face is the evolving regulatory environment. In order for us to continue our success and growth, we need to be able to effectively maintain strong relationships with the numerous local, state and federal agencies for project permits and approvals. Oftentimes, there's a different set of requirements, especially when you move from township to township, county to county and state to state. That's not to mention the federal agencies. Really, understanding this dynamic environment is what enables us to be successful. Our overall goal is to work closely with our neighbors to minimize our impact on the environment. We accomplish this through a robust project-management process.

Our many years of Appalachian experience have taught us the importance of working with our stakeholders. As a result, we have a better understanding of local permitting timelines, we're able to more accurately incorporate them into project planning and we routinely start our land and permitting processes more than a year in advance. We live here, we work here, and we believe we have a local advantage. We're a prudent operator with an over 100-year track record in the basin. As a Pittsburgh-based corporation with more than 1,800 EQT employees throughout the Appalachian basin, we were fortunate to establish what we believe is a lasting relationship with our local municipalities, our county and state regulatory agencies. As an example, at our Callisto Compressor Station in Greene County, Pennsylvania, we made a conscious decision to go the extra mile in investments by installing visually attractive sound walls and generating onsite electricity that utilizes clean-burning natural gas as its fuel. My judgment is that these types of proactive steps will allow us to continue to invest in these communities and minimize our impacts on the day-to-day life of our neighbors.

MIDSTREAM How does EQT optimize its assets?

CRAWFORD As I touched on earlier, many of our investments are focused on organic growth that leverages existing assets to move gas to market faster and more cost effectively; existing rights of way to reduce the environmental impact and project construction time; and our operational expertise and proven track record of permitting and constructing projects. This all translates into certainty that the capacity will be built, and that it will be done timely and cost competitively.

Our Sunrise project is a great example. It is comprised of the installation of 41.5 miles of 24-inch diameter pipeline that loops the Equitrans system. The project will generally parallel existing facilities, thereby reducing our environmental footprint and was placed in service in August 2012. The project links natural gas liquids (NGLs) processing with downstream transportation providing the critical infrastructure solution to facilitate the development of both liquids-rich and dry Marcellus acreage in West Virginia and western Pennsylvania.

MIDSTREAM What are your plans for future growth?

CRAWFORD We see continued opportunities to expand in the Marcellus and the adjoining Utica basin. Both are well-positioned for their continued growth, due to their low production cost and access to multiple markets. In fact, according to a Wood Mackenzie study, despite the current prices, production from the Marcellus has been growing rapidly and is expected to double from 2011 to 2015. In order to achieve this growth, significant midstream infrastructure and investment is required.

In many cases, the acreage in the Marcellus is fragmented and requires an integrated solution. I think EQT Midstream is well positioned to build such a system. It's not only for EQT, but multiple third-party shippers with a focus on cost-effective solutions that leverage economies of scale and that translate into lower unit cost. Given the current price environment, wet or liquids-rich areas in the Marcellus and Utica seem to currently offer the best returns. That's why in addition to leveraging the prolific dry areas such as Greene County, we are focusing our infrastructure build-outs in northwestern Virginia as well.

MIDSTREAM What are your thoughts on oil and gas prices?

CRAWFORD The U.S. shale revolution that has reshaped the natural gas industry over the past few years is now having the same impact on natural gas liquids and crude oil markets. Surplus natural gas supplies have depressed gas prices, driving producers to focus on high-Btu, wet-gas plays that trade closer to the price of oil. This revolution has driven natural gas production to historic levels. These dramatic changes are structurally altering the dynamics in other energy markets, including natural gas liquids and coal. In fact, for the first time, the Energy Information Administration reported (in April 2012) that natural gas and coal had equal shares of the power-generation market. The good news is the impact of shale gas in America has lowered overall energy costs for consumers and businesses. Gas prices have decoupled from oil prices in the U.S. and are half of what they are in Europe. Chemical companies who have used gas as a feedstock are now considering plans to relocate from the Persian Gulf, and cities are converting their bus fleets to natural gas.

MIDSTREAM As director for American Gas

Association, the Energy Association of Pennsylvania, the West Virginia Oil and Natural Gas Association

and the Interstate Natural Gas Association of America, what are the most important topics on the minds of upstream and midstream operators today? Which do you see as the most important?

CRAWFORD Safety remains the No. 1 priority. Several recent incidents reinforce that in order to grow, the industry needs to embrace continued diligence in this area. At EQT, we continue to focus on safety, through system integrity management programs, continued updating of procedures, monthly employee education, safety committees, rotational employee programs, root cause analyses and internal audits.

MIDSTREAM What are the biggest challenges facing the midstream world today?

CRAWFORD I would say our biggest challenge lies in the regulatory arena. The increase in regulation across the many states, townships, municipalities, states and federal agencies has the potential to delay project timing and will inevitably result in unnecessary cost increases. We address that by continuing to work closely with all of our stakeholders. As is in most cases, communication and public education is always the key. The more people understand that energy independence can be accomplished in a safe and environmentally sensitive manner, the better chance we have for all of America to prosper from this investment.

MIDSTREAM What are the sector's greatest strengths?

CRAWFORD It is the opportunity to develop a huge, relatively untapped resource that has the potential to provide energy independence and economic prosperity. The midstream business, in my judgment, is the vital link between a vast natural resource and the existing, as well as, new potential markets that will thrive because of it.

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