Profile: Williams Companies Inc (WMB)
20 May 2013
The Williams Companies, Inc. (Williams), incorporated on Febraury 3, 1987, is an energy infrastructure company focused on connecting North America’s hydrocarbon resource plays to markets for natural gas, natural gas liquids (NGLs), and olefins. The Company’s operations span from the deepwater Gulf of Mexico to the Canadian oil sands. It operates in three segments: Williams Partners, Midstream Canada & Olefins and Other. Williams’s interstate gas pipeline and domestic midstream interests are held through its investment in Williams Partners L.P. (WPZ). It owns the general-partner interest and a 70% limited-partner interest in WPZ. Williams also owns a Canadian midstream and domestic olefins production business, which processes oil sands off-gas and produces olefins for petrochemical feedstocks. In January 2012, the Company completed the process of separating the Company’s businesses into two stand-alone operations. On February 17, 2012, Williams Partners acquired 100% of the ownership interests in certain entities from Delphi Midstream Partners, LLC. On April 30, 2012, it acquired Caiman Energy's wholly owned subsidiary, Caiman Eastern Midstream, LLC. In November 2012, Williams Partners LP acquired Williams Companies Inc's approximately 83% interest in the Geismar olefins production facility, as well as Williams’ refinery-grade propylene splitter and pipelines in the Gulf region. In December 2012, the Company acquired Access Midstream Partners GP, L.L.C. and Access Midstream Partners LP.
The entities acquired from Delphi Midstream Partners, LLC primarily own the Laser Gathering System, which consists of 33 miles of 16-inch natural gas pipeline and associated gathering facilities in the Marcellus Shale in Susquehanna County, Pennsylvania, as well as 10 miles of gathering lines in southern New York. In June 2011, Aux Sable acquired an 80 one million cubic feet per day gas conditioning plant and a 12-inch, 83-mile gas pipeline infrastructure in North Dakota that provides additional NGLs to Channahon from the Bakken Shale in the Williston basin.
Williams Partners consists of the Company’s master limited partnership WPZ, which includes gas pipeline and domestic midstream businesses. The gas pipeline business includes interstate natural gas pipelines and pipeline joint venture investments, and the midstream business provides natural gas gathering, treating and processing services; NGL production, fractionation, storage, marketing and transportation; deepwater production handling and crude oil transportation services and consists of several wholly owned and partially owned subsidiaries and joint venture investments. Williams Partners owns and operates a combined total of approximately 13,700 miles of pipelines with a total annual throughput of approximately 3,000 one trillion British thermal unit of natural gas and peak-day delivery capacity of approximately 13 one million dekatherms of natural gas. Its gas pipeline businesses consist primarily of Transcontinental Gas Pipe Line Company, LLC (Transco) and Northwest Pipeline GP (Northwest Pipeline). Williams’s gas pipeline business also holds interests in joint venture interstate and intrastate natural gas pipeline systems, including a 49% interest in Gulfstream Natural Gas System, L.L.C. (Gulfstream).
Transco is an interstate natural gas transmission company that owns and operates a 9,800-mile natural gas pipeline system extending from Texas, Louisiana, Mississippi and the offshore Gulf of Mexico through Alabama, Georgia, South Carolina, North Carolina, Virginia, Maryland, Pennsylvania, and New Jersey to the New York City metropolitan area. The system serves customers in Texas and 11 southeast and Atlantic seaboard states, including major metropolitan areas in Georgia, North Carolina, Washington, D.C., New York, New Jersey and Pennsylvania. As of December 31, 2011, Transco’s system had a mainline delivery capacity of approximately 5.6 one million dekatherms of natural gas per day from its production areas to its primary markets, including delivery capacity from the mainline to locations on its Mobile Bay Lateral. Using its Leidy Line along with market-area storage and transportation capacity, Transco can deliver an additional four one million dekatherms of natural gas per day for a system-wide delivery capacity total of approximately 9.6 one million dekatherms of natural gas per day. Transco’s system includes 45 compressor stations, four underground storage fields, and an liquid natural gas (LNG) storage facility. Compression facilities at sea level-rated capacity total approximately 1.5 million horsepower.
Transco’s natural gas transportation customers are public utilities and municipalities that provide service to residential, commercial, industrial and electric generation end users. Shippers on Transco’s system include public utilities, municipalities, intrastate pipelines, direct industrial users, electrical generators, gas marketers and producers. Transco has natural gas storage capacity in four underground storage fields located on or near its pipeline system or market areas and operates two of these storage fields. Transco also has storage capacity in an LNG storage facility that it owns and operates. The total usable gas storage capacity available to Transco and its customers in such underground storage fields and LNG storage facility and through storage service contracts is approximately 200 one billion cubic feet of natural gas. As of December 31, 2011, its customers had stored in its facilities approximately 164 one billion cubic feet of natural gas. In addition, wholly owned subsidiaries of Transco operate and hold a 35% ownership interest in Pine Needle LNG Company, LLC, an LNG storage facility with four one billion cubic feet of storage capacity.
The Mobile Bay South II Expansion Project includes the addition of compression at Transco’s Station 85 in Choctaw County, Alabama, and modifications to existing facilities at Transco’s Station 83 in Mobile County, Alabama, to allow Transco to provide additional firm transportation service southbound on the Mobile Bay line from Station 85 to various delivery points. The project was placed into service in May 2011 and provides incremental firm capacity of 380 one thousand dekatherms per day. The 85 North Expansion Project includes an expansion of Transco’s existing natural gas transmission system from Station 85 in Choctaw County, Alabama, to various delivery points as far north as North Carolina. The Mid-South Expansion Project includes an expansion of Transco’s mainline from Station 85 in Choctaw County, Alabama, to markets as far downstream as North Carolina. The Mid-Atlantic Connector Project includes an expansion of Transco’s mainline from an existing interconnection in North Carolina to markets as far downstream as Maryland.
The Rockaway Delivery Lateral Project includes the construction of a three-mile offshore lateral to a distribution system in New York. The Northeast Connector Project includes the expansion of Transco’s existing natural gas transmission system from southeastern Pennsylvania to the proposed Rockaway Delivery Lateral. Northwest Pipeline is an interstate natural gas transmission company that owns and operates a natural gas pipeline system extending from the San Juan basin in northwestern New Mexico and southwestern Colorado through Colorado, Utah, Wyoming, Idaho, Oregon, and Washington to a point on the Canadian border near Sumas, Washington. Northwest Pipeline provides services for markets in California, Arizona, New Mexico, Colorado, Utah, Nevada, Wyoming, Idaho, Oregon, and Washington directly or indirectly through interconnections with other pipelines. As of December 31, 2011, Northwest Pipeline’s system, having long-term firm transportation agreements, including peaking service of approximately 3.8 one million dekatherms per day, was composed of approximately 3,900 miles of mainline and lateral transmission pipelines and 41 transmission compressor stations having a combined sea level-rated capacity of approximately 477,000 horsepower.
Northwest Pipeline transports and stores natural gas for customers, including local natural gas distribution companies, municipal utilities, direct industrial users, electric power generators and natural gas marketers and producers. Northwest Pipeline owns a one-third interest in the Jackson Prairie underground storage facility in Washington and contracts with a third party for storage service in the Clay basin underground field in Utah. Northwest Pipeline also owns and operates an LNG storage facility in Washington. These storage facilities have an aggregate working gas storage capacity of 13 one billion cubic feet of natural gas, which is utilized for third-party natural gas, and firm delivery capability of approximately 700 one million cubic feet per day enable Northwest Pipeline to provide storage services to its customers and to balance daily receipts and deliveries. Gulfstream is a natural gas pipeline system extending from the Mobile Bay area in Alabama to markets in Florida. Williams Partners owns, through a subsidiary, a 49% interest in Gulfstream while it owns an additional 1% interest through a subsidiary in Other. Spectra Energy Corporation, through its subsidiary, and Spectra Energy Partners, LP, own the other 50% interest. Williams Partners shares operating responsibilities for Gulfstream with Spectra Energy Corporation.
Williams Partners’ midstream business, which is a natural gas gatherer and processor, has primary service areas concentrated in producing basins in Colorado, New Mexico, Wyoming, the Gulf of Mexico, and Pennsylvania. The primary businesses are natural gas gathering, treating, and processing; NGL fractionation, storage and transportation, and oil transportation. Williams Partners’ gathering systems receive natural gas from producers’ oil and natural gas wells and gather these volumes to gas processing, treating or redelivery facilities. Williams Partners’ treating facilities remove water vapor, carbon dioxide, and other contaminants and collect condensate, but do not extract NGLs. NGL products include ethane, propane and normal butane. The Company’s gas processing services generate revenues primarily from fee-based contracts, keep-whole contracts and percent-of-liquids processing contracts.
Williams Partners owns and operates gas gathering, processing and treating assets within the states of Wyoming, Colorado, New Mexico, and Pennsylvania. The Company also owns and operates gas gathering and processing assets and pipelines primarily within the onshore, offshore shelf, and deepwater areas in and around the Gulf Coast states of Texas, Louisiana, Mississippi, and Alabama. In addition, Williams owns and operates several natural gas treating facilities in New Mexico, Colorado, Texas and Louisiana. At its Milagro treating facility, the Company also uses gas-driven turbines to produce approximately 60 mega-watts per day of electricity, which it primarily sells into the local electrical grid. In addition to its natural gas assets, the Company owns and operates four deepwater crude oil pipelines and owns production platforms serving the deepwater in the Gulf of Mexico. The Company’s crude oil transportation revenues are volumetric-based fee arrangements.
The Company’s offshore floating production platforms provide centralized services to deepwater producers, such as compression, separation, production handling, water removal and pipeline landings. In addition to its gathering and processing operations, the Company markets NGL products to a range of users in the energy and petrochemical industries. The NGL marketing business transports and markets equity NGLs from the production at its processing plants, and also markets NGLs on behalf of third-party NGL producers, including some of its fee-based processing customers, and the NGL volumes owned by Discovery Producer Services LLC (Discovery). The Company owns interests in and/or operates NGL fractionation and storage assets. These assets include a 50% interest in an NGL fractionation facility near Conway, Kansas, with capacity of slightly more than 100 one thousand barrels per day and a 31.45% interest in another fractionation facility in Baton Rouge, Louisiana, with a capacity of 60%. It also owns approximately 20 million barrels of NGL storage capacity in central Kansas near Conway.
Williams owns approximately 115 miles of pipelines in the Houston Shipping Channel area, which transports a range of products, including ethane, propane and other products used in the petrochemical industry. The Company also owns a 14.6% equity interest in Aux Sable Liquid Products L.P. (Aux Sable) and its Channahon, Illinois, gas processing and NGL fractionation facility near Chicago. The facility is capable of processing up to 2.1 one billion cubic feet per day of natural gas from the Alliance Pipeline system and fractionating approximately 102 one thousand barrels per day of extracted liquids into NGL products. Williams owns a 60% equity interest in and operate the facilities of Discovery. Discovery’s assets include a 600 one million cubic feet per day cryogenic natural gas processing plant near Larose, Louisiana, a 32 one thousand barrels per day NGL fractionator plant near Paradis, Louisiana, and an offshore natural gas gathering and transportation system in the Gulf of Mexico. The Company owns a 51% interest in a joint venture, Laurel Mountain Midstream, LLC (Laurel Mountain), in the Marcellus Shale located in western Pennsylvania. Laurel Mountain’s assets, which it operates, include a gathering system of nearly 1,400 miles of pipeline with a capacity of approximately 230 one million cubic feet per day. The Shamrock compressor station has a capacity of 60 one million cubic feet per day.
The Company operates and owns a 50% ownership interest in Overland Pass Pipeline Company LLC (OPPL). OPPL includes a 760-mile NGL pipeline from Opal, Wyoming, to the Mid-Continent NGL market center in Conway, Kansas, along with 150- and 125-mile extensions into the Piceance and Denver-Joules basins in Colorado, respectively.
Midstream Canada & Olefins
The Midstream Canada & Olefins segment consists of the Company’s Canadian midstream business and its domestic olefins business. The Company’s Canadian operations include an oil sands off-gas processing plant located near Ft. McMurray, Alberta, and an NGL/olefin fractionation facility and butylenes/butane splitter (B/B splitter) facility, both of which are located at Redwater, Alberta, which is near Edmonton, Alberta. It also owns ethane and propane pipelines systems in Louisiana that provide feedstock to the Geismar plant. In addition, the Company owns a refinery grade propylene splitter and associated pipeline. Its olefins business also operates an ethylene storage hub at Mont Belvieu using leased third-party underground storage wells. Williams’s Ft. McMurray area facilities extract liquids from the off-gas produced by a third-party oil sands bitumen upgrading process.
The Company extracts, fractionates, treats, stores, terminals and sells the propane, propylene, normal butane (butane), isobutane/butylene (butylene) and condensate recovered from this process. The Ft. McMurray extraction plant has processing capacity of 121 one million cubic feet per day with the ability to recover in excess of 17 one thousand barrels per day of olefin and NGL products. Its Redwater fractionator has a liquids handling capacity of 18 one thousand barrels per day. The B/B splitter, which has a production capacity of 3.7 one thousand barrels per day of butylene and 3.7 one thousand barrels per day of butane, further fractionates the butylene/butane mix produced at its Redwater fractionators into separate butylene and butane products. It also purchases small volumes of olefin/NGLs mixes from third-party gas processors, fractionate the olefins and NGLs at its Redwater plant and sells the resulting products. The Company’s products are sold within Canada and the United States.
In the Gulf of Mexico region, Williams owns a 5/6 interest in and are the operator of an NGL light-feed olefins cracker in Geismar, Louisiana, with a total production capacity of 1.35 billion pounds of ethylene and 90 million pounds of propylene per year. The Company’s feedstocks for the cracker are ethane and propane. It owns ethane and propane pipeline systems in Louisiana that provide feedstock transportation to the Geismar plant and other third-party crackers. In addition, the Company owns a refinery grade propylene splitter and associated pipeline with a production capacity of approximately 500 million pounds per year of propylene. At its propylene splitter, Williams purchases refinery grade propylene and fractionate it into polymer grade propylene and propane. As a merchant producer of ethylene and propylene, its product sales are to customers for use in making plastics and other downstream petrochemical products destined for both domestic and export markets. The Company’s olefins business also operates an ethylene storage hub at Mont Belvieu using leased third-party underground storage wells.
Williams owns and operates 63 miles of pipeline in the Houston Ship Channel area, which transport ammonia, tertiary butyl alcohol and other industrial gases for third parties. It also owns a tunnel crossing pipeline under the Houston Ship Channel, which contains multiple pipelines, which are leased to third parties. The Company also markets olefin and NGL products to a range of users in the energy and petrochemical industries.
Williams Companies Inc
One Williams Center
TULSA OK 74172