While Permian Basin oil production is thriving, natural gas opportunities in Pennsylvania’s Marcellus shale formation have not escaped the notice of US producers. Natural gas is still booming there, and one company is determined to address the challenge posed gas supplies flowing out of the region outpacing pipeline capacity.
Williams Cos.’ MLP Williams Partners has doubled down its already-vibrant Marcellus operations, increasing its ownership stake in two Marcellus Shale natural gas gathering systems already operated by the company in exchange for its 50% stake in a gas-gathering system Texas’ Delaware Basin that will be acquired by Western Gas Partners. Williams will also receive a cash payment of $155 million from Western Gas in the recent deal.
Upon closing in late 1Q17 or early Q2, Williams Partners’ ownership interest in both the Rome and Liberty gathering systems will increase to 67.5%. Current throughput there is about 1.6 Bcf/d. Williams entered a separate agreement with Anadarko to sell its 33.3% stake in the Ranch Westex gas processing plant in the Delaware Basin for $45 million.
Commenting on the deals, William Partners CEO Alan Armstrong said, “This transaction allows Williams Partners to increase its ownership in the Bradford Supply Hub, our largest gathering franchise in the Marcellus, contributing free cash flow today while exiting non-operated partial-ownership positions that were expected to require significant cash contributions.”
The Marcellus region will also see the construction of its $3 billion Atlantic Sunrise gas pipeline expansion that was approved by federal regulators earlier this month.