Williams and Brazos Midstream Announce New Strategic Joint Venture in the Permian Basin
November 15 2018 - 4:50PM
Business Wire
Partnership further enhances a best-in-class
gathering and processing position to serve producers in the
prolific Delaware Basin
Williams (NYSE: WMB) and Brazos Midstream (“Brazos”) today
announced that they have agreed to enter into a joint venture (the
“Partnership”) in the Delaware Basin. Under terms of the agreement,
Williams will contribute its existing Delaware Basin assets to the
Partnership, in exchange for a 15 percent minority position in the
joint venture. The contribution of the Williams assets will expand
the footprint of the current Brazos system and the combined
capabilities of the Partnership will provide existing and
prospective customers with an enhanced suite of services.
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Brazos – with an 85 percent ownership in the joint venture –
will operate pro-forma 725 miles of gas gathering pipelines, 260
MMcf/d of natural gas processing, 75 miles of crude oil gathering
pipelines, and 75,000 barrels of oil storage, located across
Reeves, Loving, Ward, Winkler, Pecos, and Culberson counties in
Texas. In addition, Brazos is currently constructing its previously
announced 200 MMcf/d Comanche III natural gas processing plant to
be fully operational by first quarter 2019, bringing the
Partnership’s total operated processing capacity in the Delaware
Basin to 460 MMcf/d. The joint venture will be supported by over
500,000 acres of long-term dedications currently under full-field
horizontal development from leading major and independent oil and
gas producers.
As part of the transaction, Williams and Brazos have also
entered into an agreement to jointly develop natural gas residue
solutions to further benefit Delaware Basin producers.
“This joint venture increases our scale in the Delaware Basin,
including a much larger footprint, new processing capabilities, and
greater exposure to an impressive customer base,” said Williams
Senior Vice President for Corporate Strategic Development, Chad
Zamarin. “We are pleased to partner with Brazos Midstream on this
joint venture. Their high-quality gathering pipelines and
processing assets, combined with their industry-leading
capabilities in Reeves, Ward, and Pecos counties are an excellent
match for the gathering systems and additional capabilities that
Williams is contributing as part of this transaction. With the
residue gas position that we will establish together with Brazos,
we unlock additional opportunities for value, as growing Permian
natural gas supply increasingly needs access to high-value demand
markets, including premium Gulf Coast markets served by our Transco
system, the nation’s largest pipeline system by volume.”
“Brazos operates a strategically-located midstream platform in a
region that has seen tremendous production growth,” said Brazos
Chief Executive Officer, Brad Iles. “This year we have continued to
expand our asset base in cooperation with our new sponsor, Morgan
Stanley Infrastructure Partners, in order to provide exceptional
service to our producer customers.”
Iles continued, “We are excited to form this joint venture with
Williams and greatly appreciate the confidence they have in Brazos
to entrust us with operatorship of their assets and stewardship of
their customers. Williams is well-known as one of the nation’s
premier natural gas midstream companies, and we believe this
partnership will greatly enhance both companies’ efforts to develop
top-tier assets in the Permian Basin.”
Williams President and Chief Executive Officer, Alan Armstrong
added, “This transaction is another example of high-grading our
portfolio by leveraging an existing asset into a larger integrated
system with better growth, in a manner that improves our credit
metrics over time.”
RBC Capital Markets acted as the lead financial adviser to
Williams for this transaction.
Today’s announcement does not affect Williams’ current financial
guidance.
About Williams
Williams (NYSE: WMB) is a premier provider of large-scale
infrastructure connecting U.S. natural gas and natural gas products
to growing demand for cleaner fuel and feedstocks. Headquartered in
Tulsa, Okla., Williams is an industry-leading, investment grade
C-Corp with operations across the natural gas value chain including
gathering, processing, interstate transportation and storage of
natural gas and natural gas liquids. With major positions in top
U.S. supply basins, Williams owns and operates more than 33,000
miles of pipelines system wide – including Transco, the nation’s
largest volume and fastest growing pipeline – providing natural gas
for clean-power generation, heating and industrial use. Williams’
operations handle approximately 30 percent of U.S. natural gas.
For more information, please visit www.williams.com
About Brazos Midstream
Headquartered in Fort Worth, Texas, Brazos is one of the largest
private natural gas and crude oil midstream companies in the
Delaware Basin. The Company’s assets are located in Reeves, Ward
and Pecos counties and include approximately 520 miles of natural
gas and crude oil gathering pipelines, a natural gas processing
complex with 260 MMcf/d of processing capacity in operation with an
additional 200 MMcf/d of capacity under construction, and
approximately 75,000 barrels of crude oil storage. Brazos serves
leading major and independent oil and gas producers, which together
have made long-term dedications from over 400,000 acres.
For more information, please visit www.brazosmidstream.com
Portions of this document may constitute “forward-looking
statements” as defined by federal law. Although the company
believes any such statements are based on reasonable assumptions,
there is no assurance that actual outcomes will not be materially
different. Any such statements are made in reliance on the “safe
harbor” protections provided under the Private Securities Reform
Act of 1995. Additional information about issues that could lead to
material changes in performance is contained in the company’s
annual and quarterly reports filed with the Securities and Exchange
Commission.
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version on businesswire.com: https://www.businesswire.com/news/home/20181115006051/en/
Brazos Media Contact:Meggan MorrisonM2 Communications(972)
639-8715meggan@m2commsgroup.com
Williams Media Contact:Keith Isbell(918) 573-7308
Williams Investor Contacts:John Porter(918) 573-0797
Paul Schroedter(918) 573-9673
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