No. 7 Williams Partners LP: Well-positioned for natural gas profits
BY LAURIE WINSLOW World Staff Writer
Sunday, September 16, 2012
9/16/12 at 7:32 AM
If natural gas prices make a comeback next year, Williams Partners LP potentially could benefit, according to investment professionals.
The company also has an "incredibly attractive" dividend yield in a market where CD, bond and 10-year Treasury rates are so low, said Jake Dollarhide, CEO of Longbow Asset Management Co.
"Williams Partners has always been an attractive income play from an investment management perspective. It's been a solid investment from the time that Williams created it and took it public," Dollarhide said.
Williams Partners owns and operates numerous natural gas and natural gas liquids transport systems. Tulsa-based Williams Cos. Inc. owns the general partner and controlling stake in Williams Partners.
Company executives have noted how the company's activities in the Marcellus Shale in the eastern United States are making Williams Partners the fastest-growing midstream company in the region.
The shale contains largely untapped natural gas reserves, and its proximity to high- demand markets along the East Coast of the United States makes it an attractive target for energy development.
Earlier this year, Williams Partners paid $2.4 billion for the assets of Caiman Eastern Midstream LLC in the Marcellus Shale of West Virginia, Pennsylvania and Ohio.
In July, Williams Partners announced that it will help fund a multi-million project to handle Utica Shale oil and gas output in the eastern U.S. The joint venture with Caiman Energy II will develop midstream infrastructure for transporting and processing natural gas liquids, crude oil and natural gas in Ohio and northwestern Pennsylvania, according to previous reports.
"Being one of the largest midstream service providers positions the partnership to be a key participant in the continued build-out of the energy infrastructure, particularly in the Marcellus Shale," said Michael Abboud vice president and trust investment officer of the Trust Company of Oklahoma.
He noted that both Williams Cos. and Williams Partners should benefit from the gradual recovery on NGL prices and the transition to more fee-based revenue from commodity sensitive revenues, said
Management has stated its intention to grow the distribution growth for Williams Partners at 8 percent, he said.
In July, Williams Cos. announced plans to sell its majority interest in a Louisiana olefins plant to Williams Partners. The Geismar, La., plant is a natural gas liquids cracker that produces ethane, propane and ethylene.
Address: One Williams Center, Tulsa, OK 74172-0172
Chairman/CEO: Alan S. Armstrong
CFO: Donald R. Chappel
Symbol (Exchange): WPZ (NYSE)
Operation: A master limited partnership that owns natural gas gathering, transportation, processing and treating assets.
Original Print Headline: Company positioned for natural gas profits
Laurie Winslow 918-581-8466
Natural gas storage tanks at the Williams Energy Partners terminal at New Haven, Conn. Bloomberg file