(Reuters) - Natural gas company EQT Corp (EQT.N) said it will sell its Sunrise pipeline unit to EQT Midstream Partners LP (EQM.N) for $507.5 million in cash and $32.5 million of common and general partners units.
EQT Midstream, controlled by EQT Corp, provides transportation and storage services to EQT, as well as to other companies.
Sunrise Pipeline LLC's assets include a 41.5-mile pipeline between West Virginia and Pennsylvania, a compressor station and an interconnect with the Texas Eastern pipeline in Greene County, Ohio.
The acquisition is expected to immediately add to EQT Midstream's distributable cash flow per unit, the companies said.
The midstream company said it will pay an additional $110 million subject to conditions related to a transportation agreement.
EQT Midstream also increased its cash distribution by 8 percent to 40 cents per share for the second quarter ended June.
The companies operate in the gas-rich Appalachian basin in northeast U.S.
Evercore Partners Inc was the financial adviser to EQT Midstream, while Richards, Layton & Finger P.A. was the legal counsel.
EQT shares were slightly down at $80.12 in trading after the bell. EQT Midstream shares were unchanged from their Monday's close of $46.41 on the New York Stock Exchange.
(This story is refiled to correct typo in Evercore Partners' name in paragraph eight)
(Reporting by Garima Goel in Bangalore; Editing by Sriraj Kalluvila)