Welcome to the (Midstream) Machine
Reese Energy Consulting today is studying the machine that is Tulsa-based Williams. A quick look at the number of midstream growth projects Williams has announced for 2019 would appear to run counter to its producer-customer focus on less spending and more debt reduction. But not so fast. Williams is betting it can do both. Just yesterday the company announced several beefy transactions in the Marcellus and Utica basins that not only grow their presence there but create enhanced capabilities and benefits for producers looking to sell their natural gas to hungry Northeast markets. Among those transactions is a $3.8 billion strategic JV with Canada Pension Plan Investment Board (CPPIB) that includes combining the company’s 100-percent owned Ohio Valley Midstream and Utica East Ohio Midstream systems. CPPIB invested $1.34 billion for a 35% ownership stake that allows Williams to reduce its capital spending on operational and maintenance expenses in the area, reduce debt, and fund its 10 midstream growth and expansion projects in the Northwest, Midcontinent, Gulf of Mexico, and Northeast.