Williams, Tulsa, Okla., has agreed to acquire a portfolio of natural gas storage assets from an affiliate of Hartree Partners LP for $1.95 billion.
The deal includes six underground natural gas storage facilities in Louisiana and Mississippi with total capacity of 115 bcf, as well as 230 miles of gas transmission pipeline and 30 pipeline interconnects to various markets, including LNG markets, and connections to Transco, the nation’s largest natural gas transmission pipeline, the natural gas energy infrastructure operator said in a late December 2023 release.
The six natural gas storage facilities—Arcadia Gas Storage, Cadeville Gas Storage, Perryville Gas Storage, Monroe Gas Storage, Pine Prairie Energy Center, and Southern Pines Energy Center—include four salt domes with combined capacity of 92 bcf and two depleted reservoirs with combined capacity of 23 bcf. The facilities have injection capacity of 5 bcfd and withdrawal capacity of 7.9 bcfd. Two of the facilities, Pine Prairie and Southern Pines, are directly connected with Transco and are “well positioned” for expansions, the company said.
Gulf Coast LNG demand, growing electrification
The 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,” and “allow us to provide value to customers in markets with growing renewables adoption as daily peaks for natural gas increases the need for storage,” said president and chief executive officer Alan Armstrong.
“Since 2010, US demand for natural gas has grown by 56% while gas storage capacity has only increased 12%. We expect the increasing demand for high deliverability storage to drive significant earnings growth across these assets,” Armstrong continued.
The deal, expected to close in January 2024 subject to customary closing conditions, comes on the heels of the $1.27-billion transaction Williams closed late in 2023 that now position the company as the third largest gatherer in the Denver-Julesburg (DJ) basin (OGJ Online, Nov. 30, 2023).