Williams Companies Fuels Future Growth with $1.95B Natural Gas Storage Buyout

Williams Companies Inc WMB penned a deal with an affiliate of Hartree Partners LP to acquire a portfolio of natural gas storage assets for $1.95 billion. 

The acquisition price represents around 10x the estimated 2024 EBITDA multiple. The deal includes six underground natural gas storage facilities in Louisiana and Mississippi.

The facilities have a total capacity of 115 billion cubic feet (Bcf), 230 miles of gas transmission pipeline and 30 pipeline interconnects to attractive markets. 

The six natural gas storage facilities comprise four salt domes with a combined capacity of 92 Bcf and two depleted reservoirs totaling 23 Bcf. 

The facilities have an injection capacity of 5 Bcf/d and a withdrawal capacity of 7.9 Bcf/d, which is among the highest of any natural gas storage platform in the U.S. 

Alan Armstrong, President and CEO said, "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. Since 2010, U.S. demand for natural gas has grown by 56% while gas storage capacity has only increased 12%. We expect the increasing demand for high deliverability storage to drive significant earnings growth across these assets."

The transaction is projected to close in January 2024, following fulfillment of customary closing conditions.

As of September 2023, cash and cash equivalent stood at $2.07 billion. 

Last month, the company announced the successful closure of two strategic transactions that now positions it as the third-largest gatherer in the DJ Basin. 

Price Action: WMB shares are trading lower by 0.06% at $35.10 premarket on the last check Wednesday.

Photo via Company