Williams Cos. and natural gas pipeline partnership Williams Partners LP on Thursday reduced earnings forecasts and planned capital spending through 2012 to reflect lower expected natural gas prices and natural gas liquid (NGL) margins.

CEO Steve Malcolm said the reductions would result in a slower rate of gas production growth than the company and the pipe partnership had expected. "We are adjusting our outlook and earnings guidance to reflect the current state of the economy and commodity markets," he said. "Despite the lower expected natural gas and NGL margins, we are still projecting steady earnings growth in 2010-2012."

The gas pipelines and the "fee-based portion of our midstream business provide a stable base of earnings and gas flow, and we have a solid portfolio of growth opportunities in both businesses," he said. "There are opportunities for growth across all of our businesses, and we will continue to pursue them with the same discipline that we always have."

The new earnings guidance for 2010-2012 assume gas prices on the New York Mercantile Exchange will range from $4.35/Mcf to $4.95/Mcf in 2010, with $4.00-6.00 gas prices expected in 2011 and $4.30-6.50 prices in 2012.

Based on its forecasts, Williams Cos., which is focused on developing onshore gas prospects, expects 2010 adjusted earnings of $1.00-1.20, compared with a July forecast of $1.00-1.45/share. Earnings for 2011 now are forecast to be 85 cents-$1.65/share, versus the $1.15-2.50 estimate given in July.

Capital spending at Williams Cos. for the coming year is now expected to be $2.08-3.2 billion, down from $2.4-3.7 billion estimated in July.

At Williams Partners, adjusted earnings in 2010 now are expected to be $1.38-1.51 billion, growing to $1.4-1.77 billion in 2011 and $1.5-1.99 billion in 2012.

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