Williams acquires strategic Gulf Coast natural gas storage portfolio

The transaction includes:

• Six underground natural gas storage facilities located in Louisiana and Mississippi, with total capacity of 115 billion ft³.
• 230 miles of gas transmission pipeline.
• 30 pipeline interconnects to attractive markets, including LNG markets, and connections to Transco, the nation’s largest natural gas transmission pipeline.

The acquisition price represents an approximate 10x estimated 2024 EBITDA multiple.

“This premier natural gas storage platform on the Gulf Coast fits squarely within our strategy to own and operate the best assets connected to the best markets to serve growing demand driven by LNG exports and power generation,” said Williams President and CEO, Alan Armstrong. “These assets better position Williams’ natural gas storage operations to serve Gulf Coast LNG demand and growing electrification loads from data centres along the Transco corridor. 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, US 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 six natural gas storage facilities include four salt domes with combined capacity of 92 billion ft³ and two depleted reservoirs with combined capacity of 23 billion ft³. The facilities have injection capacity of 5 billion ft³/d and withdrawal capacity of 7.9 billion ft³/d, among the highest of any natural gas storage platform in the US. Two of the facilities, Pine Prairie and Southern Pines, are directly connected with Transco and are well positioned for expansions.

The transaction is expected to close in January 2024, following satisfaction of customary closing conditions, including the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

BofA Securities served as Financial Advisor to Williams; Davis Polk & Wardwell LLP served as Legal Advisor to Williams. Evercore served as Lead Financial Advisor and Wells Fargo Securities, LLC served as Financial Advisor to Hartree; Milbank LLP served as Legal Advisor to Hartree.

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/04012024/williams-acquires-strategic-gulf-coast-natural-gas-storage-portfolio/