Williams realignment will focus on natural gas

Photo courtesy of Williams.

Williams is making organizational changes that will simplify its structure and increase direct operational alignment to advance the company’s natural gas-focused strategy and drive continued focus on customer service and execution.

“Williams is executing on a clearly articulated strategy to capitalize on growing natural gas demand to drive further value for stockholders, and to achieve maximum benefit, we must continually refine the way we operate the business,” said President and Chief Executive Officer Alan Armstrong. “The initiatives announced today will advance our strategy by optimizing our reporting structure. Our team is fully aligned, energized and focused on executing against our business plan, reducing costs, simplifying the way we make decisions, and building on our industry-leading customer service.”

The changes will create three Operating Areas:

Atlantic-Gulf: NGL & petrochemical services operations in the Gulf area, the Geismar olefins plant, the refinery grade propylene splitter and pipelines in the Gulf Coast region will be integrated into the Atlantic-Gulf operating area. Atlantic-Gulf will continue to include the Transco interstate gas pipeline, the nation’s largest and fastest-growing interstate natural gas transmission pipeline system, a 10,200-mile network with a mainline that extends nearly 1,800 miles between South Texas and New York City. Atlantic-Gulf also includes significant natural gas gathering and processing and crude oil production and handling and transportation in the Gulf Coast region. Atlantic-Gulf will continue to be led by Rory Miller, a 30-year energy industry veteran who has led the area since 2013.

West: All gathering systems, operations and commercial activities in the Barnett, Eagle Ford and Haynesville shales, the Mid-Continent region and Permian Basin will be integrated into the West Operating Area. The West operating area will also comprise the Northwest Pipeline interstate gas pipeline system as well as gathering, processing and treating operations in Wyoming, the Piceance Basin and the Four Corners area. Additionally, an NGL fractionator and storage facilities near Conway, Kansas, a rail loading facility at Hutchinson, Kansas and a 50% equity-method interest in Overland Pass Pipeline will be operated within the West Operating Area. Also included is a non-operated 50% interest in the Delaware Basin gas gathering system in the Permian Basin region. The consolidated West Operating Area will be led by Walter Bennett, who has led the West Operating Area since joining Williams in 2014.

Northeast Gathering & Processing: The Northeast Gathering & Processing Operating Area, including operations in Pennsylvania, West Virginia, Ohio and New York, remains unchanged. The area includes the Susquehanna Supply Hub and Ohio Valley Midstream, as well as a 69% equity investment in Laurel Mountain Midstream, and a 58.4% equity investment in Caiman Energy II. Caiman Energy II owns a 50% interest in Blue Racer Midstream. The Northeast Gathering & Processing Operating Area will continue to be led by Jim Scheel, who joined Williams in 1988.

The Company notes that, since early July, the Williams management team has announced a series of actions, including its strategic plan:

• Williams Partners has conditionally committed to execute a new gas gathering agreement with a new producer customer, a private company successor to Chesapeake Energy in the Barnett Shale. Additionally, Williams Partners and Chesapeake agreed to a revised contract in the Mid-Continent region. Among other benefits, this is expected to reduce customer concentration risk and result in additional drilling and volumes in the basins.
• Williams and Williams Partners have agreed to sell the companies’ Canadian businesses to Inter Pipeline Ltd. for combined cash proceeds of $1.03 B.
• Williams’ cost reduction initiatives to address the realities of slower growth in key supply areas are on-track, with $55 MM in lower adjusted costs for the second quarter of 2016 versus the prior year period despite additional assets being in service.
• Williams and Williams Partners disclosed a 2017 $3.1 B growth capital program, approximately three-quarters of which relates to Transco expansions in high growth demand markets under long-term contracts.

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