The Daley Note: September 20, 2022
Williams (WMB) is readying for the Haynesville gas supply boom, which East Daley forecasts to average 2 Bcf/d of growth in 2022 and 1.6 Bcf/d in 2023. While these projects are needed and will bring WMB upside, the ArkLaTex egress picture is still critical through our forecasts.
Both egress and gathering capacity within the basin are tight, and WMB is one of many midstreamers to announce new gathering and pipeline takeaway expansions. Following this trend, WMB is targeting five midstream projects due to enter service between 3Q22-4Q24.
WMB has plans for a Springridge gathering expansion, Haynesville West Interconnect pipeline expansion, Mansfield compression and treating expansion, South Mansfield gathering / treating expansion, and its Louisiana Energy Gateway (LEG) trunkline expansion. WMB detailed these projects in a Sept. 7 presentation.
We expect the expansions to be backed by committed volumes. Current high gas prices are good for WMB, which is feeding its own systems and eventually flowing volumes to Transco as well.
Haynesville West is a two-phase gathering and treating expansion. The first phase will connect the Springridge system to Haynesville West via a 150 MMcf/d gathering expansion, due to begin service in 1Q23. By 2Q23, WMB hopes to bring another 300 MMcf/d of pipeline and treating capacity online.
The Springridge gathering expansion includes 27 miles of new pipe plus compression/treating expansions. Phase 1 should bring 500 MMcf/d of capacity online in 3Q22, and Phase 2 adds another 100 MMcf/d of capacity in 1Q23.
WMB will expand its South Mansfield G&P system by 14 miles of pipe, adding 300 MMcf/d of capacity by 2Q23. WMB plans to also expand Mansfield Compression and treating by 150 MMcf/d by 4Q23.
Further down the line, WMB is targeting its massive LEG Gathering trunkline expansion to enter service in 4Q24. The project includes ~165 miles of pipe with two compressor stations, totaling 1.8 Bcf/d of capacity. LEG is a joint venture with Quantum Energy Partners.
ArkLaTex gas production will grow rapidly as the basin answers the call for LNG export demand. We see a supply gap that the Northeast and Permian will be unable to fill in 2H22 and 2023. We expect continued gathering and pipeline investments to meet demand. Basin takeaway should remain at high utilization until WMB’s LEG Pipeline comes online in late 2024. – Slade Rand Tickers: WMB.
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