U.S. natural gas pipeline giant Williams could be close to one of its biggest acquisitions ever as it is in late-stage talks to acquire gas pipeline operator Momentum Midstream in a deal estimated to be worth about $5.5 billion, sources with knowledge of the development have told Bloomberg.
Tulsa-based Williams could announce within weeks the deal to buy Momentum Midstream from private equity firm EnCap Flatrock Midstream, according to Bloomberg’s anonymous sources.
The agreement is not a done deal yet, as no final decision on the transaction has been made.
EnCap Flatrock Midstream was created in 2008 by Flatrock Energy Advisors and EnCap Investments L.P. The private equity firm has several midstream assets in the energy sector, including Momentum Midstream.
Momentum owns and operates the only pure pipeline header system spanning the entirety of the Haynesville Shale, directly connecting what it describes as “decades’ worth of drilling inventory” with multiple gas-fired power plants, city gates, and industrial and petrochemical facilities along the U.S. Gulf Coast. Momentum Midstream’s NG3 pipeline, 250 miles long and with a total capacity of 2.3 Bcf/d, directly links the Haynesville to the epicenter of LNG demand in Gillis, Louisiana.
In total, Momentum Midstream operates about 4,000 miles of pipelines, with 6 Bcf/d of system capacity, servicing 34 industrial end users, 26 power plants, 16 city gates, and 10 LNG facilities.
If Williams buys Momentum Midstream, the U.S. gas pipeline giant will gain additional exposure to the takeaway capacity of Haynesville shale to the booming U.S. LNG export terminals.
Williams, whose operations span the deepwater U.S. Gulf, the Rockies, the Pacific Northwest, and the Eastern Seaboard, handles about one-third of the natural gas in the United States that is used every day for residential use and for electricity generation.
The gas-focused strategy and expansion projects sent Williams’ first-quarter earnings to a record high, with net income up by 25% from a year earlier.
By Tsvetana Paraskova for Oilprice.com
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