Williams Further Advances Its Integrated Clean Energy Value Chain Strategy Through Acquisition of Assets from Trace Midstream

March 14, 2022 at 08:00 AM EDT

Acquisition expands Williams’ footprint into the East Texas region of the Haynesville, increasing in-basin scale and advancing the company’s clean energy strategy
Additional volumes committed to Williams’ Louisiana Energy Gateway project, designed to gather responsibly sourced gas in the Haynesville and connect to premium markets, including Transco and LNG exports
Memorandum of Understanding signed to form joint venture partnership with Quantum Energy Partners in support of constructing the Louisiana Energy Gateway project

Williams (NYSE: WMB) today announced that it has reached an agreement to acquire the Haynesville gathering and processing assets of Trace Midstream (Trace), a portfolio company of Quantum Energy Partners (Quantum), in a transaction valued at $950 million. The combination of the Trace system with Williams’ existing footprint provides expanded scale in one of the largest growth basins in the country, increasing the company’s gathering capacity in the Haynesville basin from 1.8 Bcf/d to over 4 Bcf/d. The acquisition is expected to result in an investment at approximately 6 times 2023 EBITDA, with strong growth anticipated and minimal expansion capital required, thereby supporting Williams’ strong credit metrics.

As part of the transaction, Trace customer and Quantum affiliate Rockcliff Energy (Rockcliff) has agreed to a long-term capacity commitment in support of Williams’ Louisiana Energy Gateway (LEG) project. The LEG project is designed to gather responsibly sourced natural gas produced in the Haynesville and connect it to premium Transco markets, as well as growing industrial and LNG export demand along the Gulf Coast.

In further support of the LEG project, Williams signed a Memorandum of Understanding with Quantum to form a joint venture that will enable Quantum to become an equity investor and partner in the project. The partnership brings together Williams’ expertise as a leading developer and operator of clean energy infrastructure with Quantum’s abilities as a leading global provider of private capital to the responsibly sourced energy and energy transition & decarbonization sectors.

“Williams continues to increase scale and connectivity in the best and most efficient natural gas basins, and these transactions with Trace, Rockcliff and Quantum represent an important extension of our natural gas-focused strategy,” said Alan Armstrong, Williams president and chief executive officer. “We are excited for the opportunity to help Rockcliff continue their success and connect them to growing markets with Quantum as our new partner in LEG. Importantly, this is going to be the flagship of our low carbon wellhead to water venture, proving up what an important role natural gas can play in reducing emissions, lowering costs and providing secure reliable energy here and around the world.”

“We have been rapidly expanding our Haynesville system to support growth from existing and new customers,” added Chad Zamarin, Williams senior vice president of Corporate Strategic Development. “By leveraging our scale, value chain integration and unique capabilities, including our Sequent Energy platform and New Energy Ventures clean energy solutions, we are facilitating the delivery of responsibly sourced gas to meet the climate goals and the energy needs of our customers and our country.”

“We are grateful for our partnership with the Trace management team who developed a strategic infrastructure platform with high ESG standards,” said Blake Webster, managing director with Quantum. “Partnering with exceptional entrepreneurs like the Trace and Rockcliff teams and building businesses of scale have been hallmarks of Quantum’s success over the years. We are also excited to establish a partnership with Williams on the LEG project, which we view as a critical bridge to connect responsibly sourced Haynesville natural gas with Gulf Coast LNG markets.”

“We are proud of the team and the business we’ve built at Trace, and we are grateful to see its success continue with Williams,” said Josh Weber, Trace chief executive officer. “Over the past four years, we have positioned ourselves in one of the most prolific resource plays in the country to transport responsibly sourced natural gas to premium markets along the Texas and Louisiana Gulf Coast. Our safe, reliable, and competitive midstream services are what our producer customers have come to expect, and we are confident that Williams will continue to be a good steward of these assets.”

The transaction is expected to close in the second quarter subject to regulatory approvals.

Advisors

RBC Capital Markets served as lead financial advisor to Williams; Citi served as lead financial advisor to Trace. Williams was represented by Davis Polk & Wardwell LLP; Trace was represented by Vinson & Elkins LLP.

About Williams

Williams (NYSE: WMB) is committed to being the leader in providing infrastructure that safely delivers natural gas products to reliably fuel the clean energy economy. Headquartered in Tulsa, Oklahoma, 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 connects the best supplies with the growing demand for clean energy. Williams owns and operates more than 30,000 miles of pipelines system wide – including Transco, the nation’s largest volume and fastest growing pipeline – and handles approximately 30 percent of the natural gas in the United States that is used every day for clean-power generation, heating and industrial use.

About Quantum

Founded in 1998, Quantum Energy Partners is a leading global provider of private equity capital to the responsibly sourced energy and energy transition & decarbonization sectors, having managed together with its affiliates more than $18 billion in equity commitments since inception. For more information on Quantum, please visit www.quantumep.com or contact Michael Dalton at (713) 452-2110.

About Trace

Houston-based Trace Midstream provides midstream solutions to producers with a focus on customer service, safety and operational excellence. Trace has operations in the Haynesville and Midcontinent regions. For more information visit www.tracemidstream.com.

About Rockcliff

Rockcliff is a premier natural gas company focused on developing the prolific East Texas Haynesville shale and is one of the top natural gas producers in the state of Texas. The company is producing certified responsibly sourced gas with top tier emission monitoring technology to fuel the U.S. and global economy. To learn more about Rockcliff, please visit www.rockcliffenergy.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220314005135/en/

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Williams Further Advances Its Integrated Clean Energy Value Chain Strategy Through Acquisition of Assets from Trace Midstream

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