en.Wedoany.com Reported - Williams Cos. announced it has reached an agreement to acquire Momentum Midstream LLC from private equity firm EnCap Flatrock Midstream in a deal valued at up to $5.5 billion. The move will expand Williams' natural gas network along the U.S. Gulf Coast and further strengthen its market position in the Haynesville shale region of East Texas and Northern Louisiana.
Under the terms of the transaction, Williams will pay $3.5 billion in cash and debt consideration, along with approximately $2 billion in stock. This is one of Williams' largest acquisitions to date. Houston-based Momentum Midstream operates 4,000 miles (approximately 6,400 kilometers) of pipelines with a daily gas transmission capacity of 6 billion cubic feet, connecting the Haynesville region to liquefied natural gas (LNG) facilities, power plants, and industrial customers along the Gulf Coast.
In addition to the acquisition, Williams also announced a $1.5 billion Delta Access expansion project along the Transco natural gas pipeline, as well as the Shelby Trough Connector expansion of the Louisiana Energy Gateway system.
Williams reported second-quarter results on Monday that exceeded analyst expectations, and its shares rose approximately 1.9% after regular trading hours in New York. Bloomberg reported in June that Williams had already entered advanced-stage negotiations to acquire Momentum Midstream at that time.
Although U.S. President Donald Trump is pushing to expand America's energy infrastructure, new pipeline construction still faces legal challenges and lengthy federal permitting processes, making acquisitions a more practical option for pipeline operators to expand their networks. Williams currently has more than 30,000 miles of pipeline infrastructure, and this acquisition will increase its capacity to transport natural gas from the Haynesville region to export terminals along the Gulf Coast.
The United States is currently the world's largest LNG exporter. With a wave of new export terminals coming online in Texas and Louisiana, its international export volumes are expected to nearly double by the end of this decade. Once these facilities become operational, they will place greater transmission pressure on pipelines out of Haynesville, the major natural gas production basin closest to the Gulf Coast.
In this transaction, BofA Securities served as Williams' lead financial advisor, with Davis Polk & Wardwell acting as its legal counsel; Barclays and Jefferies LLC served as Momentum's financial advisors, with Kirkland & Ellis acting as its legal counsel; and Willkie Farr & Gallagher LLP served as EnCap Flatrock's legal counsel.
