US gas pipeline company Williams has reached an agreement to acquire a portfolio of natural gas storage assets from Hartree Partners for $1.95bn.
The deal includes six underground storage facilities in Louisiana and Mississippi, with a combined capacity of 115 billion cubic feet (Bcf) of natural gas.
It also encompasses 370.14 km of gas transmission pipeline and 30 pipeline interconnects, enhancing access to key markets and the nation’s largest natural gas transmission pipeline, Transco.
The acquisition is aimed at bolstering Williams’ position in the natural gas sector, providing enhanced storage capabilities and improved market connectivity to cater to the rising demand.
The six underground storage facilities feature four salt dome storage facilities and two depleted reservoirs, with combined capacity of 92 Bcf and 23 Bcf, respectively.
Williams said the facilities have an injection capacity of 5 Bcf/d and a withdrawal capacity of 7.9 Bcf/d, positioning the storage platform among the highest in terms of capacity in the US.
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Notably, two facilities – Pine Prairie and Southern Pines – offer direct connections to natural gas transmission pipeline Transco, presenting opportunities for future expansions.
Williams president and CEO Alan Armstrong said: “This premier natural gas storage platform on the Gulf Coast fits squarely within our strategy to own and operate the best assets connected to the best markets to serve growing demand driven by LNG exports and power generation.
“These assets better position Williams’ natural gas storage operations to serve Gulf Coast LNG demand and growing electrification loads from data centers along the Transco corridor. Importantly, this storage will also allow us to provide value to customers in markets with growing renewables adoption as daily peaks for natural gas increases the need for storage.”
Armstrong stated that the demand for natural gas in the US has risen by 56% since 2010, but the gas storage capacity has increased only by 12%.
This disparity highlights the potential for earnings growth through the newly acquired assets, he added.
The transaction is expected to complete in January 2024, subject to the fulfilment of customary closing conditions.