We consider linear magneto-quasistatic field equations which arise in simulation of low-frequency electromagnetic devices coupled to electrical circuits. A finite element discretization of such equations on 3D domains leads to a singular system of differential-algebraic equations. First, we study the structural properties of such a system and present a new regularization approach based on projecting out the singular state components. Furthermore, we present a Lyapunov-based balanced truncation model reduction method which preserves stability and passivity. By making use of the underlying structure of the problem, we develop an efficient model reduction algorithm. Numerical experiments demonstrate its performance on a test example.

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