Equitrans Midstream Corp (ETRN) Q4 2020 Earnings Call Transcript

Image source: The Motley Fool.

Equitrans Midstream Corp (ETRN 4.46%)
Q4 2020 Earnings Call
Feb 23, 2021, 10:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Thank you for standing by, and welcome to the Equitrans Midstream Q4 and Full Year 2020 Earnings Call. [Operator Instructions] Thank you. I would now like to hand the conference over to Nate Tetlow, Vice President, Corporate Development and Investor Relations. Mr. Tetlow, please go ahead.

Nate Tetlow -- Vice President, Corporate Development and Investor Relations

Good morning, and welcome to the year-end 2020 earnings call for Equitrans Midstream Corporation. A replay of this call will be available for 14 days beginning this evening. The phone number for the replay is 800-585-8367 or 416-621-4642. The conference ID is 4233629.

Today's call may contain forward-looking statements related to future events and expectations. Please refer to today's news release and risk factors in ETRN's Form 10-K for the year ended December 31, 2019 and as updated by Form 10-Qs for factors that could cause the actual results to differ materially from these forward-looking statements. Also, the Form 10-K for the year ended December 31, 2020 is expected to be filed with the SEC later today. Today's call may contain certain non-GAAP financial measures. Please refer to this morning's news release and our investor presentation for important disclosures regarding such measures, including reconciliations to the most comparable GAAP financial measure.

On the call today are Tom Karam, Chairman and CEO; Diana Charletta, President and Chief Operating Officer; Kirk Oliver, Senior Vice President and Chief Financial Officer; Justin Macken, Senior Vice President, Gas Systems Planning and Engineering; and Brian Pietrandrea, Vice President and Chief Accounting Officer. After the prepared remarks, we will open the call to questions.

And with that, I'll turn it over to Tom.

Thomas F. Karam -- Chairman of the Board and Chief Executive Officer

Thanks Nate, and good morning. We hope everyone is continuing to stay safe and healthy. Today, we reported full-year net income of $638 million and adjusted EBITDA of $1.2 billion. Kirk will provide more details on the financials in a few minutes.

2020 was an unprecedented year as we all navigated the pandemic. E-Train acted quickly to implement COVID-19 protocols, all while achieving a number of very significant accomplishments. We executed a new 15-year gas gathering agreement with EQT, establishing the foundation for long-term stable cash flows and enhanced capital efficiency. We simplified our structure by rolling EQM into ETRN. We advanced our ESG efforts, which included publishing our first comprehensive sustainability report and also recently establishing our climate policy. We strengthened our liquidity and balance sheet through a $1.6 billion long-term bond offering. We made slow but certain progress with MVP. And lastly, our operations teams didn't miss a beat during a very challenging environment, continuing to deliver results, all while maintaining the highest safety standards.

I'll now turn it over to Diana for the operations update, and then Kirk will provide financial update and I'll come back for some closing remarks before we open the call to your questions. Diana?

Diana Charletta -- President and Chief Operating Officer

Thanks Tom, and good morning, everyone. Let's start with MVP. In January, the project secured another key permit as the Bureau of Land Management granted a right-of-way permit for MVP's crossing in the Jefferson National Forest. We are currently working on the single outstanding regulatory approval, which relates to our remaining waterbody and wetland crossings. The waterbody authorization is a two-pronged approach. First, MVP has applied to the Army Corps Districts for an individual project permit to implement open-cut crossing techniques on a selected group of water bodies. And second, MVP has submitted a Certificate Amendment application to the FERC, requesting to utilize trenchless crossing methods for certain crossings, previously approved as open-cut.

Our primary focus is on the process and ensuring the agencies have everything they require to perform a thorough review and issue authorizations that will withstand challenge. One quick note on the legal side. Last Friday, the DC Circuit Court of Appeals denied a motion for stay brought by project opponents related to several FERC orders. We are pleased with this decision and appreciate the comprehensive work that is done and continues to be done by FERC and all the federal agencies involved.

In terms of construction, our current view is that we will have all permits in hand by mid-year, allowing us to ramp up to full construction. This would still allow us to meet the targeted full in-service date in May 2021. The total project cost estimate remains approximately $5.8 billion to $6 billion. At the midpoint, E-Train expects to fund approximately $2.9 billion of the overall cost.

Moving to gathering, for the full-year 2020, we averaged 8.2 Bcf per day of gathered volume, which was roughly a 5% increase over 2019. We did see a nice uptick in Q4 volumes, which averaged 8.6 Bcf per day, as the summer and fall volume curtailments were back online. We continue to expect our producer customers to be less focused on volume growth in 2021 and more focused on efficient capital deployment. As such, our 2021 guidance reflects roughly flat year-over-year volumes.

Now, for a short recap of some of our 2020 and more recent ESG efforts. In 2020, we published our first comprehensive sustainability report, which was produced in accordance with both the GRI and SASB reporting standards. Our report is available on our website and offers easy to navigate functionality. Beyond the formal report, we also took several tangible steps during the last 12 months, including establishing the Board appointed role of Chief Sustainability Officer; increasing our Board to nine Directors, including the addition of two new female Directors -- our Board now includes eight Independent Directors of which half are female; launching a diversity and inclusion program focused on employee education and talent recruitment; publishing our initial Climate Policy, which includes a long-term goal of net zero carbon by 2050 and interim targets of 50% reduction in methane emissions by 2030 and 50% reduction in greenhouse gases by 2040. The climate policy is also available on the sustainability pages of our website. And lastly, we have incorporated methane emission mitigation targets into our 2021 short-term incentive plan, ensuring that we have companywide incentive to work toward our interim and long-term climate policy targets. We're excited about where our ESG efforts are going, and we'll continue to provide updates as we make progress.

Lastly, we continue to drive capital efficiency improvements. Our gathering capex came in right around $300 million for the full year, which was more than 25% lower than our expectation at the beginning of the year. We expect continued capital efficiency in 2021 and the coming years, driven by the new EQT gathering agreement, which provides for more flexibility across our gathering systems and transmission assets.

I'll now turn the call over to Kirk.

Kirk Oliver -- Senior Vice President and Chief Financial Officer

Thanks Diana, and good morning, everyone. This morning, we reported full-year net income attributable to E-Train common shareholders of $364 million and earnings per diluted E-Train common share of $1.06. Net income was $638 million, adjusted EBITDA was just over $1.2 billion and deferred revenue was $226 million. We also reported full-year net cash provided by operating activities of approximately $1.1 billion and free cash flow of $317 million.

For the quarter, net income attributable to E-Train common shareholders was $118 million, and earnings per diluted E-Train common share was $0.27. Net income for the quarter was $137 million, adjusted EBITDA was $286 million and deferred revenue was $77 million. In the fourth quarter, we generated $370 million of net cash provided by operating activities and $87 million of free cash flow. Net income for the quarter was impacted by a $21 million unrealized loss on derivative instruments, which is reported within other income. This is related to the contractual provision entitling E-Train to receive cash payments from EQT, conditioned on specific NYMEX, Henry Hub natural gas prices exceeding certain thresholds during the three years post MVP is in service. After adjusting for the loss on derivative, Q4 adjusted net income attributable to E-Train common shareholders was $134 million and adjusted earnings per diluted E-Train common share was $0.31.

E-Train operating revenue for the fourth quarter 2020 was lower compared to the same quarter of last year by $59 million. This was primarily from the impact of $77 million of deferred revenue in the fourth quarter of this year. The reduced revenue was partially offset by higher gathered volumes and increases in transmission and water revenue.

Operating expenses for the fourth quarter 2020 were $577 million lower than the fourth quarter of 2019. The decrease was mainly driven by a $584 million impairment of long-lived assets in Q4 2019. O&M expenses were down about $8 million versus the same quarter last year and this was offset by increases in depreciation and SG&A expenses.

For the fourth quarter, E-Train paid a quarterly cash dividend of $0.15 per common share on February 12 to ETRN common shareholders of record at the close of business on February 3. At year-end, we had approximately $2 billion available under the EQM revolver and approximately $208 million of consolidated cash. And finally, in January, we raised $800 million of eight-year senior notes with a 4.5% coupon and $1.1 billion of 10-year senior notes with a 4.75% coupon. Proceeds from the new issuances addressed our nearest term maturities with $1.4 billion used to repay the EQM Term Loan A and $500 million used for a tender of the EQM 2023 senior notes.

I'll now hand the call back to Tom.

Thomas F. Karam -- Chairman of the Board and Chief Executive Officer

Thanks Kirk. So in summary, 2020 was a busy year with a number of accomplishments that should position us well for the coming years. Our long-term strategy is designed to consistently generate substantial free cash flow, allocate our capital and free cash flow with discipline, and deliver maximum value to our shareholders.

Before taking your questions, I wanted to briefly comment on what we saw last week in Texas with the winter storm, power outages and the aftermath. First, we hope all our friends, families and colleagues are safe and doing well. This event highlights the critical role of energy infrastructure. We need major upgrade investments in our electric grids across the nation. Alongside this, we need continued investment in natural gas infrastructure to maintain the base load certainty of demand [Phonetic]. Projects like MVP that will serve the Southeastern United States will safely transport the natural gas supply needed to ensure that base load certainty can be achieved. Last week taught us all that reliability cannot and should not be ignored. Everyone expects to be able to heat their homes in the winter and cool them in the summer. Access and reliability must be the first priority, and we firmly believe natural gas and natural gas infrastructure plays a long-term integral role in delivering this reliability.

With this, we're happy to take your question.

Questions and Answers:

Operator

[Operator Instructions] Jeremy Tonet with J.P. Morgan, your line is open.

James Kirby -- J.P. Morgan -- Analyst

Hey. Good morning. This is James on for Jeremy. I just wanted to...

Diana Charletta -- President and Chief Operating Officer

Good morning.

James Kirby -- J.P. Morgan -- Analyst

Good morning. Just wanted to start, I notice that EQT is building their own water infrastructure. I believe they mentioned in earnings. I'm just wondering maybe if there is any conversation to have that constructed by you guys and what the relationship is kind of going forward with the Chevron assets.

Justin Macken -- Senior Vice President, Gas Systems Planning and Engineering

Hi, good morning. This is Justin. Just touching on EQT's plans, so we have a lot of our water assets in Pennsylvania and some in Ohio, but our focus has really been on leveraging those existing water assets in Pennsylvania going forward. EQT does have some existing water assets in West Virginia, and they'll likely be able to leverage those as they build out their new water system. We have a lot of construction synergies in Pennsylvania, as we build out the gas and water infrastructure together. Because of the location of the water sources in West Virginia, we don't see as many opportunities to co-locate gas and water facilities and realize those capital synergies unless we are they're giving us [Phonetic]. So, we've had those conversations with EQT and certainly understand their plans unless [Indecipherable] how that makes sense for them. And just to reiterate, we are very much focused on realizing all the capital efficiencies on our build-out in Pennsylvania.

James Kirby -- J.P. Morgan -- Analyst

Got it, and that makes sense. Appreciate the color there. And then, just looking at the capex, I think 2020 came in a little below what you guys guided to. I'm just wondering what the moving pieces were there, if there was anything pushing to 2021? And then, just on the gathering side, is that just well connects, given EQT is kind of operating at maintenance mode and that's just the well connects there hooking up to your system next year? Or is there something else embedded in that?

Justin Macken -- Senior Vice President, Gas Systems Planning and Engineering

Sure. 2020, we started to realize some of the benefits of the EQT gathering deal and the capital efficiencies built into that arrangement. As we look at '21, most of it is well connects. I do want to mention also of the little over $300 million in gathering capex that we do have. We also have about $50 million of compression projects built into that. And those compression projects also bring with them incremental fees, even if it's not increasing the volumes. It's probably a little bit different than what we would consider to be sustaining capex because those projects do carry some additional revenue with them. But outside of that, you're right, it's mostly well connects for EQT and the other producers we work with.

James Kirby -- J.P. Morgan -- Analyst

Great. Thanks a lot. I'll stop there.

Operator

John Mackay with Goldman Sachs. Your line is open.

John Mackay -- Goldman Sachs -- Analyst

Hey. Good morning. Thanks for the time. Wanted to ask about the FERC amendment request process. So, you filed that last week. Looks like there was about 120 bores to do. I know you can do a lot of these in parallel and some will take more time than others. Just wondering if you can share any more detail on when you expect to be able to start that and then really, I guess, how many crews you can have along the right-of-way at once? Thanks.

Diana Charletta -- President and Chief Operating Officer

So let me just take that as an opening. Hi. This is Diana. And maybe I can answer everybody's MVP questions all at one time. So, we have two primary types of construction work remaining. We've the uplands in the Jefferson National Forest and parts of Virginia, and then we have the water crossings. We've completed the compressor stations and original interconnects. So, that work is all done. We have about 265 miles of pipe welded, which leaves approximately 40-ish miles to complete, so the water crossings are all included in that mileage. We estimate that complete the -- we can complete the upland work and, as you asked, the water crossings inside of six months, and our schedule assumes the remaining approvals by midyear. So given that we aren't starting from scratch, the same route, the same crossings, considering the amount of data that the agencies have already reviewed, we expect the agencies, the Army Corp, FERC, West Virginia DEP, Virginia DEQ, will take four months to six months to complete their work and issue their approvals of the water crossings, which then does include whatever comment periods that they have to do. So, this time frame is built into our schedule and guidance. I think that's the nuts and bolts of everything. There are different pieces of the right-of-way that we can have different things [Phonetic] we believe we can get done in under six months.

John Mackay -- Goldman Sachs -- Analyst

I appreciate that. That's helpful. Maybe just one more on that side. Can you just talk a little bit more about the -- so that -- you mentioned the boring process. But for the individual permits, just what that process actually looks like? And maybe if you can share anything on your conversations with Virginia at this point?

Diana Charletta -- President and Chief Operating Officer

Sure. So for the individual process for the permits, the agency will follow a very well-established Section 404 permitting process. It includes analysis of open-cut crossings and public input. There is a well-established process to receive the 401 water certificates. We have to get that from West Virginia and Virginia, and that's intended to happen concurrently inside that Army Corp process. We have had conversations with them, obviously, but we did just submit 6,600 pages in our application. So it's going to take them a little bit to digest, and then we'll be able to talk more about what that time frame looks like.

John Mackay -- Goldman Sachs -- Analyst

All right. Understood. Thanks for that. That's it from me.

Diana Charletta -- President and Chief Operating Officer

Thank you.

Operator

Spiro Dounis with Credit Suisse. Your line is open.

Spiro Dounis -- Credit Suisse -- Analyst

Hey. Morning, everyone. Diana, first one for you. [Indecipherable] you almost answered a few questions. But I did have some follow-up, unfortunately. Just in terms of [Technical Issues] it's helpful on the time line for six months for the agencies to work that out. Just curious in terms of the goalpost that we should be looking for. I know there's a public comment period, a lot of back and forth around things like that. Could you just, for the benefit of the people on the call, walk us through some of the big mile markers you see as that process plays out?

Diana Charletta -- President and Chief Operating Officer

So, I don't know that there is anything. Obviously, the Virginia and West Virginia approvals from the DEQ and the DEP will happen within there. And then, the FERC will ask whatever questions and whatever additional information they need from us. We'll get that back to them. There are some comment periods in both processes, but I can't tell you exactly when those will happen yet. So, I think it's really -- I don't know that there is anything that I can point to concretely that should be the first thing you see.

Spiro Dounis -- Credit Suisse -- Analyst

Okay. Understood. And just one more follow-up on that as well. Just in terms of thinking about that six months or under six months to complete the water crossings, is that [Indecipherable] clock start once you have the permit in hand? Or is there preliminary work you're kind of doing ahead of that? And so, really, once you get the permit, it's something less than six months or well inside of it?

Diana Charletta -- President and Chief Operating Officer

So it's well inside of it. Obviously, we can be doing the open-cuts with certain crews and we can be doing the bores with other crews. So those two things, they don't have to be done in some kind of series. They can all be done in parallel as long as -- and I don't think we're going to have any problem getting crews as far as activity goes, so well inside six months.

Spiro Dounis -- Credit Suisse -- Analyst

Okay. Lastly...

Diana Charletta -- President and Chief Operating Officer

We have -- sorry, we do have uplink [Phonetic] work that we can do before that to prep and be ready. We have the ability to be working, and we probably won't start that though until the weather breaks and get moving on that.

Spiro Dounis -- Credit Suisse -- Analyst

Understood. Okay. That's helpful color. Last one quickly. I'm sorry if I missed it, but guidance for 2021 seems to imply a stepdown in EBITDA generation for the back three quarters as opposed to the first quarter. And so, just curious what's driving that decline in the latter part of the year? And really, what I'm getting at is, how much of that is you being conservative versus kind of firm gas [Phonetic] from some of your producers?

Diana Charletta -- President and Chief Operating Officer

So as far as volumes, we did see an uptick in fourth quarter volumes last year, and we're certainly happy to see that. Right now, we are guiding to flat, which is what we have been hearing from our producers. We did see some curtailments due to pricing last year. So as we -- it's still kind of relief for us to be more optimistic than not. So we are kind of sticking with the flat right now and we'll go from there. We're lumpy because of the usage on the system as far as quarter-to-quarter, but nothing really big.

Spiro Dounis -- Credit Suisse -- Analyst

Got it. Thanks Diana. Do well, everybody.

Diana Charletta -- President and Chief Operating Officer

Thank you.

Operator

Brian Reynolds with UBS. Your line is open.

Brian Reynolds -- UBS -- Analyst

Hi. Good morning, everyone. This is Brian Reynolds on for Shneur Gershuni. On the gas gathering agreements, my understanding that if MVP is not online by 1Q '22 that you could see the optionality for a $200 million cash payment or to lower its cost structure. Could you guys provide some color around potential payment? And could this potentially reduce G&P and/or transportation fees on MVP? Thanks.

Justin Macken -- Senior Vice President, Gas Systems Planning and Engineering

Yeah. That was related to the shares that we repurchased from EQT. So if you recall, we bought back 25.3 million shares of E-Train. So the payment they would receive is really consideration for those shares. So, as the agreement sits today, once MVP is in service, EQT would be entitled to two years of rate relief as consideration. But if MVP is not in service by January of '22, EQT could elect to take that consideration in the form of a one-time payment and forgo the gathering rate reliefs.

Brian Reynolds -- UBS -- Analyst

Great. And is there -- I guess, would it be just cash consideration? Or is there, I guess, any type of color around how that payment would happen? Would it happen on January 1? Or is it kind of still in a negotiation period?

Justin Macken -- Senior Vice President, Gas Systems Planning and Engineering

It would be a cash payment. I believe they have one year to exercise that option. So, I think EQT will just have to make a decision if MVP is not in service starting in January. They can elect that option if they so choose.

Brian Reynolds -- UBS -- Analyst

Great. Thanks. And I guess just as one quick follow-up, is there a resolution to Hammerhead? Or ultimately, does that come with more clarity around MVP in-service timeline and kind of negotiation with EQT ultimately?

Thomas F. Karam -- Chairman of the Board and Chief Executive Officer

Yeah. This is Tom. There's no resolution yet. Hammerhead isolated issue is in arbitration and it will run its own course completely separate from all the other activity that we have going on with EQT and separate from anything having to do with MVP.

Brian Reynolds -- UBS -- Analyst

Great. Thank you, guys, for the color, and have a great and safe day.

Diana Charletta -- President and Chief Operating Officer

Thank you.

Operator

Alex Kania with Wolfe. Your line is open.

Alex Kania -- Wolfe Research -- Analyst

Hey. Good morning. Two questions. First, could you just kind of go through the -- kind of how maybe AFUDC accounting changes for this year? And secondly, just a couple of your partners kind of have elected to impair their investments in MVP. I'm just kind of wondering kind of what -- how -- is there a difference of opinion? Or is this just really a call based on their accountants? And then, to the extent that there is an impairment at some point, does that actually have any kind of impact to kind of credit or anything like that, that maybe -- that we should be thinking about?

Kirk Oliver -- Senior Vice President and Chief Financial Officer

Yeah. This is Kirk. So if I can remember them, I'll try to go in reverse order. So if there were an impairment, there's -- it doesn't create any problems in any of our indentures or credit agreements or anything of that nature. On the impairment, we've been consistent in our approach on how we look at the impairment, and we'll continue to be consistent. We're not afraid to take an impairment. We are following the accounting rules, and we just don't see an impairment at this time. And then, I think your other question was on the AFUDC. And basically, there's been a lot of fits and starts on MVP over time. And so, what we've decided to do going forward is to just accrue the AFUDC on the actual construction of the pipe, what we're calling kind of the growth component of getting the project done. We're no longer going to be accruing on maintenance capital. That's going into, basically, [Indecipherable] the pipe.

Alex Kania -- Wolfe Research -- Analyst

Got it. Okay. So, that doesn't -- it doesn't impact cash or anything like that?

Kirk Oliver -- Senior Vice President and Chief Financial Officer

No. [Speech Overlap]

Alex Kania -- Wolfe Research -- Analyst

Right. And then I guess maybe this is following up on the water permits, but just is there -- it seems like you've probably been working with the agencies to make sure that you've got fulsome applications. Does it feel like just the kind of the tone of conversations is pretty constructive? And it feels like these are very kind of straightforward approval processes. I'm just wondering if there are any kind of pitfalls or anything like that or even maybe early indications that we may get from any agencies prior to this kind of this four-month to six-month approval process?

Diana Charletta -- President and Chief Operating Officer

Yeah. So it's a pretty comprehensive filing. The data is all there. This is a normal standard course of business permit that -- as far as the water-crossing permit goes that everybody gets not -- just not gas. So it's -- renewables ask for the same kind of individual permits, electric and power sectors. So it's something they do in normal course of business, and we don't expect anything too crazy to come out of it.

Alex Kania -- Wolfe Research -- Analyst

Great. Thanks.

Operator

Derek Walker with Bank of America. Your line is open.

Derek Walker -- Bank of America -- Analyst

Thank you, and good morning, everyone. Maybe just a quick one around the conversations with credit agencies. I think EQT mentioned that it sold down storage [Phonetic] capacity. You talked about some of the partners taking impairments. I guess, just how -- and obviously, this wholesale [Phonetic] application that you just filed with the Corps and the FERC. I guess, how have those conversations gone with the credit agencies? Thanks.

Thomas F. Karam -- Chairman of the Board and Chief Executive Officer

Yeah. We stay in dialogue with the agencies. The treasury team stays in communication with them and tries to keep them updated, and we don't surprise them. The agency's big focus with us is -- and just basically continues to be what it has been, which is MVP. So that's what they're really watching. They haven't given us any -- there's no line that's been drawn in the sand on anything around that, but that's -- I mean that's their -- that's obviously their point of focus.

Derek Walker -- Bank of America -- Analyst

Got it. Maybe just a quick follow-up. And Diana, I appreciate your comments around the comprehensive application. But if we do see a FERC commission sort of the majority change for the mid-year, does that kind of change how you guys think about how these -- how the applications can get reviewed? Thanks.

Diana Charletta -- President and Chief Operating Officer

No. It doesn't really change the review process. We've been in close contact with FERC and staff and understand what they need as far as the application. And we've had good comments as far as -- from FERC commissioners as to meeting the permits and then being able to proceed.

Derek Walker -- Bank of America -- Analyst

Great. Thank you. That's it from me. Appreciate it.

Operator

[Operator Instructions] John Mackay with Goldman Sachs. Your line is open.

John Mackay -- Goldman Sachs -- Analyst

Yeah, thanks. Just wanted to ask a few more follow-ups. EQT talked about being able to offload some of its capacity on MVP. Just curious if you guys might be able to share who was taking that up? And I know they're running the process, but really anything else on that front that might be helpful. Thanks.

Thomas F. Karam -- Chairman of the Board and Chief Executive Officer

Yeah, John. This is Tom. No, we can't share anything beyond what EQT has said in that regard. And clearly, we're well aware of the activity and are, in fact, supportive of it. I think it's -- we shouldn't read too much into this. Historically, it's been the natural progression of long-haul pipes that they were initiated and originated by supply push issues that then, over time, transition to demand pull customers. And by the production company releasing some of its capacity, that doesn't mean that they won't make firm gas sales to fill that capacity, so that you could misread it to say, well, gee, the pipe isn't needed any longer when, in fact, what it is, is a transitioning to the demand pull customers, holding the capacity for their own reliability and certainty, and then coupling that with firm gas sales from some of those same upstream customers. So, we're supportive of it. We think it's the natural progression and transition of many long haul pipes, and we think it's a situation where it could be beneficial to EQT and to E-Train and to the downstream demand pull customers.

John Mackay -- Goldman Sachs -- Analyst

That's fair. That makes a lot of sense. That absolutely helps, too, when you guys try to do the debt refinancing on MVP. So definitely makes sense, just taking a bit any more color. Maybe I'll just follow-up with one last one. Back to EQT, there should be some other development from West Virginia -- or sorry, to West Virginia from Pennsylvania. Does that have any impact on you guys this year? Is that baked into guidance, or could that be upside?

Diana Charletta -- President and Chief Operating Officer

That's baked into guidance. That's part of the new gathering agreement that we signed with them, that dedication. So it's well in our plans.

John Mackay -- Goldman Sachs -- Analyst

Okay. Well, that is it from me. Thanks for letting me do two rounds. Appreciate it.

Diana Charletta -- President and Chief Operating Officer

Thank you.

Operator

There are no further questions at this time. It is now my pleasure to turn the call back over to Thomas Karam for closing comments.

Thomas F. Karam -- Chairman of the Board and Chief Executive Officer

We'd just like to thank, everybody, for joining the call today. And to stay safe, wash your hands. And hopefully, we'll talk to you again soon. Have a good day.

Operator

[Operator Closing Remarks]

Duration: 36 minutes

Call participants:

Nate Tetlow -- Vice President, Corporate Development and Investor Relations

Thomas F. Karam -- Chairman of the Board and Chief Executive Officer

Diana Charletta -- President and Chief Operating Officer

Kirk Oliver -- Senior Vice President and Chief Financial Officer

Justin Macken -- Senior Vice President, Gas Systems Planning and Engineering

James Kirby -- J.P. Morgan -- Analyst

John Mackay -- Goldman Sachs -- Analyst

Spiro Dounis -- Credit Suisse -- Analyst

Brian Reynolds -- UBS -- Analyst

Alex Kania -- Wolfe Research -- Analyst

Derek Walker -- Bank of America -- Analyst

More ETRN analysis

All earnings call transcripts