Williams LP is raising is capital expenditure (capex) budget for the remainder of 2018 and 2019 to account for recently announced transactions that extend its footprint into the Denver-Julesburg Basin and have it exiting the Four Corners region of the United States, the company said Thursday.

Williams is boosting 2018 capex to $3.9 billion, up from $3.1 billion, and in 2019 to $2.6 billion, up from $2.4 billion.

The midstream operator earlier this week announced that it is partnering with KKR & Co. to buy Discovery DJ Services from TPG Growth in a $1.173 billion deal. Separately, the Tulsa, OK-based company also announced the combined sale of assets and equity comprising Williams Partners LP’s Four Corners Area (FCA) business in New Mexico and Colorado to Harvest Midstream Co. in a $1.125 billion all-cash deal.

“Selling assets in a maturing basin at attractive multiples, and redeploying that capital to higher growth basins, enhances our position to capitalize on future growth opportunities and follows our strategy to connect the best supplies to the best markets,” Williams CEO Alan Armstrong said.

The increase in capex also is related to other planned expansions in the West and Northeast gathering and processing segments. Last week, the company said it is planning to expand its jointly owned Jackalope Gas Gathering System and associated Bucking Horse gas processing facility.

The expansion would increase processing capacity of the Jackalope system, co-owned by Crestwood Equity Partners LP, in the “underserved growth basin” of the Niobrara formation to 345 MMcf/d by the end of 2019. The expansion includes an increase in capacity of the Bucking Horse plant in Converse County, WY, to 145 MMcf/d from 120 MMcf/d by the end of the year.

Meanwhile, the long-awaited Atlantic Sunrise project is “nearing completion”, and Williams is targeting full in-service at the end of August, Armstrong said on a call to discuss quarterly earnings. The company chief praised the team working on the Transcontinental Gas Pipe Line expansion project “for their focus on doing the right thing, both from a safety perspective and an environmental compliance perspective.

“They have been very thoughtful and listening to regulators and key stakeholders in the communities and their careful planning, engineering and patience is truly distinguishing our efforts as we near completion of this important project,” Armstrong said.

Citing “very tough” regulatory issues, religious orders, a tight skilled labor market and record levels of rainfall, the team handled the issues “with tremendous diligence professionalism and integrity, he said.

Armstrong said it is “clear that the demand for natural gas that we have been saying is just around the corner has recently come to life in a very dramatic manner”, noting that all sectors of natural gas demand are up in 2018 compared to the equivalent 2017 time period.

For example, liquefied natural gas exports are 57% higher year-to-date versus 2017; power is up about 9% versus 2017 and “industrial was up and growing very rapidly,” he said. As a result, natural gas storage inventories are nearly 20% below the five-year average, and yet price remains low, “creating another wave of investment in business.

“All of this spells higher production volumes and transmission throughput” in the United States to keep up with rapidly growing domestic and global demand, Armstrong said.

On the earnings front, Williams reported net income during the second quarter of $135 million (16 cents/share), an increase of $54 million from the $81 million (10 cents) in reported net income for the second quarter 2017. The increase was driven primarily by a $32 million increase in operating income due largely to an increase in service revenues and natural gas liquids (NGL)  margins, but partially offset by the absence of $25 million of operating income earned in 2Q2017 by the company’s former olefins operations.

Williams Partners reported a net income for 2Q2018 of $426 million (44 cents/share), up $106 million over a net income of $320 million (33 cents) in 2Q2017. In addition to the increase in service revenues and NGL margins, the company also benefited from a $62 million gain on the deconsolidation of the partnership's interests in the Jackalope system. Partially offsetting the improvements was a $33 million decrease in equity earnings primarily driven by lower earnings at Discovery Producer Services.