FERC approves Northwest Pipeline pre-filed rate settlement

TULSA, Okla. - Williams Partners L.P. (WPZ) on April 27 announced that its Northwest Pipeline system received approval from the Federal Energy Regulatory Commission on a pre-filed rate settlement.

Northwest filed a Stipulation and Settlement Agreement with the FERC on March 15.

The supporting or non-opposing customers named in the settlement represent approximately 99.5 percent of Northwest's long-term firm transportation and storage capacity.

Williams (WMB) owns approximately 69 percent of Williams Partners, including the general-partner interest.

"We're pleased to have reached a settlement with our customers. We appreciate the long-standing relationships with them that allowed us to work cooperatively and reach a timely quick settlement," said Randy Barnard, senior vice president of the partnership's interstate gas pipeline business.

The settlement is based on an annual cost of service of $466.5 million and established a new general system firm transportation rate of $0.44 per dekatherm, a 7.4 percent increase over the current rate. New rates will become effective Jan. 1, 2013. Northwest can file another rate case in three years and must file within five years. The settlement is in line with Williams Partners' and Williams' earnings and cash flow guidance for 2013 and 2014.

Williams Partners notes progress on natural gas supply hub in Pennsylvania

TULSA, Okla. - Williams Partners L.P. (NYSE: WPZ) on Feb. 21 announced two major milestones in its strategy to create a major natural gas supply hub in northeastern Pennsylvania.

Williams (NYSE: WMB) owns 72 percent of Williams Partners.

The new 120-mile Constitution Pipeline will connect Williams Partners' gathering system in Susquehanna County, Pa., to the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in Schoharie County, NY. Williams Partners will own 75 percent of Constitution Pipeline and, through its affiliates, will provide construction, operation and maintenance services for the new pipeline. Cabot will own the remaining 25 percent.

The new pipeline will initially be designed to transport at least 500,000 dekatherms per day of Cabot's Marcellus production, but will be expandable to meet growing demand for takeaway capacity in northeast Pennsylvania.

Constitution Pipeline will be regulated by the Federal Energy Regulatory Commission (FERC). Williams Partners expects to initiate the FERC application process soon.

Williams Partners also has completed the acquisition of the Laser Northeast Gathering System and other midstream businesses from Delphi Midstream Partners, LLC. The original acquisition along with additional pipeline construction was funded with $329 million in cash and approximately 7.5 million Williams Partners units.

These two projects are key steps in Williams Partners' strategy to create the Susquehanna Supply Hub, a major natural gas supply hub in northeastern Pennsylvania.

By 2015, Williams Partners expects the Susquehanna Supply Hub to be capable of delivering more than three billion cubic feet per day (Bcf/d) of Marcellus Shale production into four major interstate gas pipeline systems.

"We are developing all the key elements of a major new supply area hub, where we can provide Marcellus Shale producers in northeast Pennsylvania with a large-scale gathering system that has significant takeaway capacity to the best available markets," said Alan Armstrong, chief executive officer of Williams Partners' general partner. "It's key to our strategy of providing large-scale infrastructure and continuing to build on our significant fee-based midstream and gas pipeline businesses."

Williams Partners' gathering system in northeastern Pennsylvania currently covers three counties and has a capacity of 750 million cubic feet per day (MMcf/d). With the recent start-up of the Springville pipeline, it is now connected to three major interstate gas pipeline systems - Williams Partners' Transco system, Tennessee Gas Pipeline and Millennium Pipeline.

Williams Partners to acquire Williams' Piceance assets

TULSA, Okla. - Williams Partners L.P. (NYSE: WPZ) announced on Oct. 28 that it has agreed to acquire Williams' (NYSE: WMB) gathering and processing assets in Colorado's Piceance Basin for $782 million.

Williams Partners' total consideration for the assets will include $702 million in cash and $80 million in WPZ limited-partner and general-partner units.

The assets include the Parachute Plant Complex, three other treating facilities with a combined processing capacity of 1.2 billion cubic feet per day (Bcf/d), and a gathering system with approximately 150 miles of pipeline.

There are more than 3,300 wells connected to the gathering system, which includes pipelines ranging up to 30-inch trunk lines.

Williams Partners plans to fund the cash portion of the acquisition, which is expected to close next month, with its revolving credit facility and/or debt. The transaction is expected to be immediately accretive to distributable cash flow for Williams Partners, on a per-unit basis for the partnership's unitholders.

"This acquisition adds significant scale to our overall midstream business and makes Williams Partners the largest and most diverse midstream provider in the Piceance Basin," said Steve Malcolm, chief executive officer of the general partner of Williams Partners. "Furthermore, we have a long-term gathering agreement in place with Williams, which is the largest producer in the Piceance Basin.

"It also adds to the fee-based portion of our midstream business, as nearly 100 percent of the revenue associated with these assets is fee-based," Malcolm said.

Williams Partners expects the new assets will generate approximately $105 million in segment profit plus depletion, depreciation and amortization (DD&A) for its midstream business in 2011.