Williams Partners L.P.
) got the federal nod for the expansion of its Transco natural
gas pipeline. This expansion project − with total cost of $341
million − is intended to expand capacity by an added 250,000
dekatherms to better serve the emergent markets in the Northeast.
This expansion venture comprises the installation of around 12
miles of new pipe at different locations in Pennsylvania and New
Jersey. It also includes a new 25,000 horsepower compressor
facility in Essex County, New Jersey, as well as other facility
modifications. The partnership expects the new line to be in
service by November 2013.
The construction of the compressor station is expected to start
this month, while the pipeline is scheduled for spring next year.
The Transco pipeline expansion is in sync with the Northeast
Supply Link project, which is planned to develop the Transco
Leidy Line and Transco mainline in Pennsylvania and New Jersey
for shipping domestic supplies of natural gas to the northeastern
Williams Partners' Leidy Southeast expansion project is aimed at
serving the gas distribution companies in the local areas as well
as electric power generators along the Atlantic Seaboard and
throughout the southeastern U.S. This venture will be in-service
by late 2015.
In contrast, the 10,200-mile Transco pipeline system delivers
natural gas to markets throughout the northeastern and
southeastern United States. Currently, it has a daily capacity of
approximately 9.7 million dekatherms.
Williams Partners is an energy master limited partnership engaged
in gathering, transportation, treating and processing of natural
gas as well as fractionation and storage of natural gas liquids
(NGLs). The general partner of the partnership is owned and
Williams Companies Inc.
During the third quarter, the partnership registered lackluster
earnings, which decreased 58.2% year over year in the wake of
lower NGL margins. Higher costs related to developing new
businesses purchased earlier in the year were also responsible
for the decline in earnings. Hence, we remain apprehensive about
the partnership's midstream segment owing to weak NGL price
Williams Partners retains a Zacks #3 Rank, which is equivalent to
a short-term Hold rating.
WILLIAMS COS (WMB): Free Stock Analysis
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