Williams Partners L.P. (NYSE:WPZ) announced that its wholly owned subsidiary, Transcontinental Gas Pipe Line Company, LLC (Transco), has filed an application with the Federal Energy Regulatory Commission (“FERC”) seeking consent to build a 475,000 dekatherm per day (Dth/d) expansion in Texas and Louisiana.
The expansion – Gulf Connector Project – will link the U.S. natural gas supplies with global liquefied natural gas (LNG) markets. The expansion will be executed in two phases. The Gulf Connector Project is intended to provide 75,000 Dth/d to Freeport LNG Development, L.P.’s liquefaction project by the second half of 2018, while it will deliver 400,000 Dth/d to Cheniere Energy’s Corpus Christi liquefaction terminal in 2019. Currently, both the liquefaction facilities are under construction
Subject to appropriate regulatory approvals, construction on the first phase of the project will commence in the third quarter of 2017. The project is expected to come online during the second half of 2018.
The Freeport LNG export terminal will comprise three liquefaction trains with projected cumulative export capacity of 15.3 million tons per annum (mtpa) and is scheduled to begin operations in phases between Sep 2018 and Aug 2019.
Cheniere Energy’s Corpus Christi liquefaction terminal is projected to have about five liquefaction trains (two of which are under construction) with projected cumulative nominal production capacity of about 22.5 mtpa of LNG. Most of the work on trains one and two at the Corpus Christi liquefaction terminal are expected to be completed by 2019.
Given that natural gas demand to serve the LNG export facilities along the Transco pipeline is estimated to grow by about 11,000 MDth/d by 2025, we believe that Williams Partners is advantageously positioned. This is because the Transco pipeline passes through every U.S. state with an LNG export facility currently under construction.
The Gulf Connector Project includes adding compression and making the natural gas flow bi-directional on a portion of the Transco pipeline system between Louisiana and South Texas. The project intends to deliver incremental firm transportation from Transco’s Station 65 in St. Helena Parish, LA to mainline interconnects with planned header pipelines in Wharton County, TX and San Patricio County, TX.
The project is part of Williams Partners’ 2016 and 2017 growth capital plan that comprises $1.3 billion in 2016 and $2.4 billion in 2017 for Transco expansions and other interstate pipeline growth projects. It is fully subscribed by Osaka Gas Trading & Export, LLC, whose associate is a limited partner of Freeport LNG Development, L.P., and Corpus Christi Liquefaction, LLC, a subsidiary of Cheniere Energy. Both have executed long term, firm transportation agreements with Transco.
Williams Partners currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked players from the energy sector are Parsley Energy, Inc. (NYSE:PE) , NGL Energy Partners LP (NYSE:NGL) and Enviva Partners L.P. (NYSE:EVA) . All these stocks sport a Zacks Rank #1 (Strong Buy).
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