A must-know overview of Williams Companies’ major capital projects

Market Realist

Everything investors need to know about Williams Companies (Part 7 of 12)

(Continued from Part 6)

The Geismar plant

Following the accident that took place in the Geismar olefins plant in June 2013 and its consequent shutdown, Williams Companies (WMB) has been working to increase the plant’s capacity. The expansion is expected to increase the facility’s ethylene production capacity by 600 million pounds per year to a total of 1.95 billion pounds per annum.

As of 2Q14, there’s been an eight-to-six-week delay in completing the safety enhancement procedures at the project. The project is now expected to come online in 4Q14.


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Gulfstar

Williams Partners’ Gulfstar One is a proprietary floating production system (or FPS). WMB has multiple agreements with two major producers of oil and gas in Gulfstar.

FPS is used in deepwater drilling. Typically, FPS receives fluids (crude oil, water, and a host of other things) from a subsea reservoir. Most FPSs are like ships that are “anchored” or “moored” by a turret.

Located in the Gulf of Mexico in Texas, the new initiatives in Gulstar FPS are expected to have an initial capacity of 60 thousand barrels per day of oil, up to 200 million cubic feet per day of natural gas, and seawater injection services capability.

In April 2013, WMB sold a 49% interest in Gulfstar One LLC to a third party.

Keathley Canyon Connector

Under Williams Partners’ Atlantic-Gulf expansion program, the company is constructing a 215-mile deepwater pipeline.

The natural gas pipeline will originate from a third-party floating production facility in the southeast portion of the Keathley Canyon area and will connect to Discovery’s existing 30-inch offshore natural gas transmission system.

The pipeline is estimated to have the capacity to flow more than 400 million cubic feet per day. It’s expected to be in service by 4Q14.

Key stocks and ETFs

Williams Companies (WMB) is a component of the Energy Select Sector SPDR (XLE). Other companies in the midstream energy processing and transportation space include Enterprise Products Partners (EPD) and TC Pipelines (TCP). Some of these are components of XLE and the Alerian MLP ETF (AMLP).

Continue to Part 8

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