Takeaways by Bloomberg AI
- Williams Cos. reached a deal to buy Momentum Midstream LLC from EnCap Flatrock Midstream through a deal valued up to $5.5 billion, expanding its natural gas network along the US Gulf Coast.
- Williams will pay $3.5 billion in cash and debt consideration and about $2 billion in stock for the company, adding to its position in the Haynesville shale region of East Texas and northern Louisiana.
- The acquisition adds 4,000 miles of pipelines with a capacity of 6 billion cubic feet of gas a day, connecting the Haynesville area to LNG facilities, power plants and industrial customers along the Gulf Coast.
Williams Cos. reached a deal to buy Momentum Midstream LLC from the private equity firm EnCap Flatrock Midstream through a deal valued up to $5.5 billion, expanding its natural gas network along the US Gulf Coast.
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Williams will pay $3.5 billion in cash and debt consideration and about $2 billion in stock for the company, according to a Monday.
The acquisition is one of the largest for Williams and adds to its already dominant position in the prolific Haynesville shale region of East Texas and northern Louisiana. Pipeline operators in the US have been seeking to supply a wave of liquefied natural gas export terminals being constructed amid a global boom in demand.
Houston-based Momentum Midstream 4,000 miles (6,400 kilometers) of pipelines with a capacity of 6 billion cubic feet of gas a day connecting the Haynesville area to LNG facilities, power plants and industrial customers along the Gulf Coast.
Alongside the acquisition, Williams also announced the $1.5 billion Delta Access expansion project along its Transco natural gas pipeline network, and the Shelby Trough Connector, an expansion of its Louisiana Energy Gateway system, according to the statement.
Shares of Williams, which reported second-quarter results Monday that beat analysts’ expectations, rose about 1.9% after the close of regular trading in New York.
Bloomberg reported in June that Williams was in advanced talks to acquire Momentum Midstream.
Despite President Donald Trump’s push to expand US energy infrastructure, building new pipelines remains fraught with legal challenges and a lengthy federal permitting process. Those obstacles have made acquisitions an increasingly attractive way for pipeline operators to expand their networks.
Williams, which already owns more than 30,000 miles of pipeline infrastructure, will add capacity to move gas from the Haynesville region to export terminals on the US Gulf Coast through the deal to buy Momentum.
The US, already the world’s top LNG exporter, is expected to roughly double its international shipments by the end of the decade after a wave of new terminals enters service in Texas and Louisiana.
As those massive, geopolitically strategic facilities are built, they will put increasing pressure on the pipelines shipping gas from the Haynesville area, which is the nearest major gas-producing basin to Gulf.
BofA Securities served as Williams’ lead financial adviser. Davis Polk & Wardwell was the company’s legal adviser on the deal. Barclays and Jefferies LLC served as Momentum’s financial advisers, and Kirkland & Ellis served as legal counsel to Momentum. Willkie Farr & Gallagher LLP acted as legal counsel to EnCap Flatrock.
— With assistance from Stella Mackler
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