Tulsa-based Williams has clinched agreements with Quantum Energy Partners that include more than doubling its Haynesville Shale natural gas midstream footprint to 4 Bcf/d-plus from 1.8 Bcf/d.
In one deal, Williams agreed to pay $950 million for Quantum’s Trace Midstream, which holds East Texas natural gas gathering and processing assets.
A memorandum of understanding with Quantum also may lead to a joint venture for the proposed Louisiana Energy Gateway (LEG) system. Trace customer and Quantum affiliate Rockcliff Energy also agreed to a long-term capacity commitment to support LEG.
“Williams continues to increase scale and connectivity in the best and most efficient natural gas basins, and these transactions with Trace, Rockcliff and Quantum represent an important extension of our natural gas-focused strategy,” said Williams CEO Alan Armstrong. “We are excited for the opportunity to help Rockcliff continue their success and connect them to growing markets with Quantum as our new partner in LEG.
“Importantly, this is going to be the flagship of our low-carbon wellhead to water venture, proving up what an important role natural gas can play in reducing emissions, lowering costs and providing secure reliable energy here and around the world.”
RSG Growth Likely
The transactions could lead to Williams moving responsibly sourced gas (RSG) to markets that include liquefied natural gas (LNG) exports via the mainstay Transcontinental Gas Pipe Line, aka Transco. Quantum is an investor in Project Canary, which uses the Trustwell certification process to differentiate gas supply as RSG.
“We have been rapidly expanding our Haynesville system to support growth from existing and new customers,” said Williams’ Chad Zamarin, senior vice president of Corporate Strategic Development. “By leveraging our scale, value chain integration and unique capabilities, including our Sequent Energy platform and New Energy Ventures clean energy solutions, we are facilitating the delivery of responsibly sourced gas to meet the climate goals and the energy needs of our customers and our country.”
Williams last year completed the takeover of Sequent Energy Management LP and Sequent Energy Canada Corp. from Atlanta utility Southern Company. Sequent was among North America’s largest natural gas marketers by sales volumes. The acquisition is expected to increase Williams’ gas pipeline marketing footprint to more than 8 Bcf/d.
Williams over the past year also made some big moves to expand its natural gas gathering and transmission base, including in the Haynesville in a joint venture with private GeoSouthern Energy Corp. Williams recorded gathering volumes of 13.9 Bcf/d in 2021, up 5% from 2020. Contracted transmission capacity was 23.8 Bcf/d, up 3%.
“Partnering with exceptional entrepreneurs like the Trace and Rockcliff teams and building businesses of scale have been hallmarks of Quantum’s success over the years,” Quantum managing director Blake Webster said. “We are also excited to establish a partnership with Williams on the LEG project, which we view as a critical bridge to connect responsibly sourced Haynesville natural gas with Gulf Coast LNG markets.”
Over the past four years, Trace has positioned itself “in one of the most prolific resource plays in the country to transport responsibly sourced natural gas to premium markets along the Texas and Louisiana Gulf Coast,” Trace CEO Josh Weber said. Management is “confident that Williams will continue to be a good steward of these assets.”
The transaction is expected to be completed by the end of June.
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