Williams Companies Strikes $2 Billion Deal for Gas Storage Assets
Energy infrastructure company, the Williams Companies Inc. (NYSE:WMB), has agreed to acquire a portfolio of natural gas storage assets from Hartree Partners for $1.95B, a purchase the company says will improve its natural gas storage operations to meet growing power demand for Gulf Coast LNG and data centers along the Transco corridor.
The gas assets include six underground natural gas storage facilities in Louisiana and Mississippi with total capacity of 115B cf, 30 pipeline interconnects to attractive markets including connections to Transco and 230 miles of gas transmission pipeline. Transco is the largest U.S. natural gas transmission pipeline
"Importantly, this storage will also allow us to provide value to customers in markets with growing renewables adoption as daily peaks for natural gas increases the need for storage," Williams President and CEO Alan Armstrong said in a press release.
WMB has gone on an M&A spree as the company looks to expand and enhance its gas pipeline network. Williams has acquired MountainWest Pipelines consisting ~2,000 miles of interstate pipeline systems and 56 billion cubic feet of storage capacity from Southwest Gas (NYSE: SWX) for $1.07 billion in cash and assumed $430 million of MoutainWest's debt. MountainWest’s pipeline network runs across Utah, Wyoming, and Colorado.
This acquisition has helped to expand the company's services in the Rockies region and also boost its cash flows backed by government-regulated rate structures. Williams says there are significant synergies as it integrates the incoming system into its existing assets, which it says could allow it to offer additional services to shippers.
Earlier, Williams acquired Trace Midstream's Haynesville gathering and processing assets as well as NorTex Midstream.
The company has been using its improved balance sheet to expand its natural gas infrastructure platform.
Last month, Williams CEO Alan Armstrong told shareholders that low natural gas prices are good for the company in the long term because they tend to increase demand for transportation, both on gathering systems and big transmission systems.
The company delivered a beat in its third quarter earnings report with adjusted EBITDA revenue clocking in at $1.65B, versus its consensus estimate of $1.61B, and EPS of $0.45 (ex-items), compared to its $0.41 consensus estimate.
By Michael Kern for Oilprice.com
More Top Reads From Oilprice.com:
