LNG

Jan 3 (LNGJ) - Williams, a leading US natural gas pipelines operator with projects aimed at boosting feed-gas supplies for Gulf Coast LNG plants, has priced a public offering of 2.1 billion in Senior Notes, a type of bond that takes precedence over other debts. The offering of $1.1Bln of its 4.900 percent Senior Notes due 2029 was at a price of 99.839 percent of par and $1.0 Bln of its 5.150 percent Senior Notes due in 2034 were priced at 99.975 percent of par.

   “The expected settlement date for the offering is January 5, 2024, subject to the satisfaction of customary closing conditions,” said Williams, which is based in Tulsa, Oklahoma. “Williams intends to use the net proceeds of the offering for general corporate purposes, which may include the repayment of our outstanding commercial paper notes or other near-term debt maturities,” it added. The joint book-running managers of the offering were named as Barclays Capital, Citigroup Global Markets, Truist Securities and Wells Fargo Securities.

Chevron Corp., the US major with large overseas liquefied natural gas interests, has signed an accord on US natural gas development for Gulf Coast LNG feed-gas pipeline volumes from the prolific Haynesville Basin as well as for oil and gas in the deepwater Gulf of Mexico with pipelines group Williams.

The agreement involves Williams providing natural gas gathering services to Chevron’s 26,000-acre Haynesville assets while Chevron has agreed to a long-term capacity commitment on the Louisiana Energy Gateway project led by Williams.

The Williams-led Louisiana Energy Gateway project is designed to gather gas in the Haynesville and connect to markets, including the Transcontinental Gas Pipe Line (Transco) and LNG exports.

The Gateway project is designed to gather “responsibly-sourced natural gas” produced in the Haynesville for growing industrial and LNG export demand along the Gulf Coast.

Additionally, Williams has agreed to use existing infrastructure to serve increased production from the Blind Faith platform, located 160 miles southeast of New Orleans in the Gulf of Mexico.

US and overseas

“This is a great example of Williams and Chevron working together to accelerate the development and delivery of natural gas to supply affordable, reliable, ever cleaner energy both here in the United States and overseas,” said Alan Armstrong, President and Chief Executive of Tulsa, Oklahoma-based Williams.

“We are proud to take another step in advancing the output potential of two of the most prolific production areas in North America,” stated Armstrong.

Chevron has a large overseas portfolio as well as its US natural gas interests, including operatorships of the Australian Gorgon and Wheatstone LNG export plants in Western Australia as well as the Angola plant in southwest Africa.

Williams handles one-third of natural gas supplies in the US with major positions in the main supply basins through its ownership of more than 32,000 miles of pipelines, including Transco, the nation’s largest-volume system.

As part of the Haynesville agreement, Williams said it planned to construct a greenfield gathering system in support of Chevron’s acreage with connectivity to the Williams Gateway project.

Gateway schedule

The Gateway project is expected to go into service in 2024 and is a key component of the Williams lower-carbon, wellhead-to-water strategy.

Williams noted that the Gateway project is ideally positioned to incorporate carbon-capture and storage as a further decarbonizing solution for natural gas production in the rapidly growing Haynesville basin.

In the deepwater Gulf of Mexico, Chevron is developing the Ballymore tieback to the Blind Faith platform.

The project, which involves three production wells tied back via one flowline to the nearby Blind Faith facility, has a design capacity of 75,000 barrels of crude oil per day.

Using existing connections to Blind Faith, Williams will provide offshore natural gas gathering and crude oil transportation services as well as onshore natural gas processing services for the production.

Chevron is the operator of the Ballymore project with a 60 percent working interest. The co-owner is French major TotalEnergies with a 40 percent working interest.

Williams Companies, the US natural gas pipelines and assets operator, has agreed a $950 million deal to expand its East Texas presence in the Haynesville Shale and giving more access to Gulf Coast LNG markets.

The US owner of the Transcontinental Gas Pipe Line (Transco), the nation’s largest interstate natural gas delivery system linking LNG export plants and domestic natural gas markets in 12 Southeast and Atlantic Seaboard states, has become the latest company to adopt protective measures from takeovers at a time of low equity prices.

Williams, the owner of the largest US natural gas pipeline that underpins LNG feed-gas deliveries on the Gulf Coast and domestic supplies in the northeast, has signed an agreement with the largest Canadian pension fund for a US$3.8 billion joint venture in the prolific Marcellus and Utica Shale Basins in Pennsylvania and Ohio.

Williams and the Canada Pension Plan Investment Board have entered into a definitive agreement to establish the joint venture that will include Williams’ 100 percent-owned Ohio Valley Midstream system and 100 percent of Utica East Ohio Midstream system. Both are natural gas and gas liquids gathering and storage systems.

The Canadian pension fund will invest around US$1.34 billion for a 35 percent ownership stake in the joint venture company, while Williams will retain 65 percent ownership and will operate the combined business.

The fund has 20 million Canadian contributors and beneficiaries and at the start of 2019 had C$368.5 billion (US$276Bln) under management.

Analysts said that the fund was a surprise investor in US shale given the high proportion of Canadians who oppose hydrocarbon energy projects, even when thousands of jobs are on offer.

Williams, based in Tulsa, Oklahoma, owns the Transcontinental Gas Pipe Line (Transco) interstate system which in the past winter season delivered record amounts of natural gas to US distribution companies, power generators and LNG exporters because of the successful expansion in interconnections in recent years.

The Transco system extends almost 1,800 miles from South Texas to New York City and is part of the Williams network of 30,000 miles of interstate pipelines and natural gas storage facilities.

The abundant US natural gas supplies are being delivered into domestic markets when required as well as to liquefaction and LNG export plants. The LNG plants are set to double in number from three operational facilities to six by the end of 2019.

In addition to signing its joint venture with the Canadian fund, Williams also purchased the remaining 38 percent stake it did not already own in the Utica East Ohio (UEO) Midstream system from US company Momentum Midstream.

UEO is involved primarily in the processing and fractionation of natural gas and natural gas liquids in the Utica Shale play in eastern Ohio.

“Acquiring the remaining interest in UEO and forming a partnership with CPPIB continues to advance our already strong position in the Northeast,” said Alan Armstrong, President and Chief Executive of Williams.

“These transactions create a platform for continued optimization and growth, provide deleveraging, reduce capital spending on processing and fractionation capacity and unlock further synergies through combined operatorship of the systems,” he added.

Avik Dey, a managing director and head of energy and resource investments at the pension fund, said he was delighted to invest in the projects with Williams.

“The joint venture would provide additional exposure to the attractive North American natural gas market, aligning with our growing focus on energy transition,” said Dey.

US pipeline company Williams said its Transcontinental Gas Pipe Line (Transco) interstate system delivered a record amount of natural gas in January to distribution companies, power generators and LNG exporters because of successful expansions and the trend will continue in 2019 and 2020.

Transco delivered a record 15.68 million dekatherms (MMdt) on January 21 and the new peak-day mark surpassed the previous high that was set on January 5 last year.

In addition to being a major supplier to the growing LNG export industry, Transco provides natural gas to markets in 12 Southeast and Atlantic Seaboard states, including America’s biggest metropolitan areas.

The pipeline system, extending almost 1,800 miles from South Texas to New York City, also established a new three-day market area delivery record, averaging 15.30 MMdt from January 30 to February 1, 2019.

Williams, based in Tulsa, Oklahoma, said the natural gas delivery records were the result of additional firm transportation capacity created by multiple fully-contracted Transco expansions completed in 2018 and early 2019.

The abundant US natural gas supplies are being delivered into domestic markets when required as well as to liquefaction and LNG export plants. The LNG plants are set to double in number from three operational facilities to six by the end of 2019.

Williams said its pipeline expansions included the Gulf Connector, Atlantic Sunrise and the Garden State Phase II projects.

The company said that together, these expansions added more than 2.3 MMdt of firm transportation capacity to the existing pipeline system.

Construction is expected to commence on five additional Transco projects in 2019.

These are for the Rivervale South to Market system, Hillabee Phase 2, the Northeast Supply Enhancement and the Gateway and Southeastern Trail projects, collectively creating approximately 1.15 MMdt of additional pipeline capacity in 2019 and 2020.

“The recent frigid conditions across the country are an important reminder of the vital role transmission pipelines play in delivering the natural gas necessary to keep millions of Americans safe and secure, especially during winter periods of peak demand,” said Alan Armstrong, President and Chief Executive of Williams.

“The incremental capacity from the fully-contracted Transco expansion projects placed into service in 2018 and early 2019 reflects an increase of about 16 percent in Transco’s design capacity,” he added.

“This has helped position us to meet the growing demand needs of our customers,” stated Armstrong.

Williams, the US pipeline and infrastructure company, said its Gulf Connector project has been placed into full service to expand its Transcontinental Gas Pipe Line (Transco), the nation’s largest interstate natural gas pipeline, with more liquefied natural gas ventures.