Williams net income slips despite gas gathering, transmission records

Williams Cos. had net income of $164 million in third-quarter 2021 on adjusted earnings before interest, taxes, and depreciation (EBITDA) of $1.42 billion, compared with third-quarter 2020 figures of $308 million and $1.27 billion respectively. The lower net income was primarily attributed to a $277-million net unrealized loss in Williams’ Sequent Energy Management LP business segment. Williams completed its acquisition of Sequent from Southern Co. Gas in July 2021. The company also reported record quarterly gathering volume of 14 bcfd and record quarterly contracted transmission capacity of 23.8 bcfd.

It will put the second phase of its 582-MMcfd Leidy South expansion in full service in time for the winter heating season  and is executing another 1.5 bcfd in expansions along its Transcontinental Gas Pipe Line (Transco) and Gulfstream transmission corridors (OGJ, Nov. 1, 2021, p. 47). Williams brought 125 MMcfd of Leidy South capacity online in November 2020 and 382 MMcfd in November 2021. The remaining 75 MMcfd is expected to be online by year-end 2021.

Included in the additional Transco expansion are two Mid-Atlantic projects adding 523 MMcfd to the system. Commonwealth Energy Connector will add 100 MMcfd and Southside Reliability Enhancement 423 MMcfd. Williams also filed a US Federal Energy Regulatory Commission application in March 2021 for its 829-MMcfd Transco Regional Energy Access expansion, designed to connect Marcellus shale natural gas production to Northeast demand by the 2023-24 heating season.

During third-quarter 2021 the company reached agreement with Shell Offshore Inc. and Chevron USA Inc. for an expansion project to provide transportation from the Whale offshore development to Williams’ Perdido infrastructure in the Western GoM (OGJ Online, Aug. 4, 2021). It expects the project to come online in 2024.

Adjusted EBITDA of $630 million Williams’ Transmission & Gulf of Mexico (GoM) segment, its largest, was $8 million higher than third-quarter 2020. Its largest percentage gains came in its West segment, in which adjusted EBITDA increased to $293 million from $245 million.

The company attributed its improved Transmission & GoM earnings to increased revenues from transmission expansion projects and favorable commodity margins; partially offset by slightly higher segment operating costs and hurricane-related shut-ins. In the West, higher results were driven by favorable marketing margins, lower maintenance expenses, and higher gathering and processing commodity-based rates.