Pine Prairie is one of six natural gas storage facilities included in the transaction; Source: Williams

US player’s natural gas storage arsenal fortified with additional Gulf Coast assets

United States-based energy infrastructure provider Williams has enriched its natural gas storage capabilities by putting the finishing touches on an acquisition of six Gulf Coast assets. As a result, the company now owns and operates more than 400 billion cubic feet (bcf) of natural gas storage across the United States. These assets are expected to come in handy due to the growing demand for LNG exports and power generation.

Pine Prairie is one of six natural gas storage facilities included in the transaction; Source: Williams

According to Williams, the newly added portfolio of six underground natural gas storage facilities in Louisiana and Mississippi, which come with a total capacity of 115 billion cubic feet, were acquired from an affiliate of Hartree Partners LP and entail 230 miles of gas transmission pipeline, 30 pipeline interconnects — including to LNG markets — and connections to the firm’s Transco system.

Alan Armstrong, Williams’ President and Chief Executive Officer, commented: “This premier natural gas storage platform on the Gulf Coast fits squarely within our strategy to own and operate the best assets connected to the best markets to serve growing demand driven by LNG exports and power generation.

“These assets better position Williams’ natural gas storage operations to serve Gulf Coast LNG demand and growing electrification loads from data centers along the Transco corridor. Importantly, this storage will also allow us to provide value to customers in markets with growing renewables adoption as daily peaks for natural gas increases the need for storage.”

Armstrong explained that U.S. demand for natural gas had risen by 60% since 2010 while gas storage capacity had grown by only 12%. The six natural gas storage facilities encompass four salt domes and two depleted reservoirs. These facilities have an injection capacity of 5 bcf/d and a withdrawal capacity of 7.9 bcf/d.

The U.S. player claims that this capacity is among the highest of any natural gas storage platform in the United States. Two of the facilities, Pine Prairie and Southern Pines, are directly connected with Transco. Williams believes that these are well-positioned for expansions.

“Natural gas storage is key to meeting high demand periods during winter and summer, along with increasing global need for LNG and as a back-up to renewable energy,” outlined the U.S. company, which acquired NorTex Midstream natural gas pipeline and storage assets in North Texas in 2022.

In addition, Williams got its hands on MountainWest transmission and storage assets serving western markets in early 2023. The Northwest Pipeline connects to six natural gas storage facilities located along its system, providing 135 billion cubic feet of additional natural gas during peak demand. Williams also operates the Pine Needle LNG storage facility in North Carolina.

With several new pipeline projects moving forward, Armstrong told CNBC in November 2023 that infrastructure expansions would need to keep up with rapidly growing natural gas markets in the U.S. and abroad.

“The drive for electrification is on, and dispatchable power capable of keeping up with the carbon capture, hydrogen production and data centers is going to be largely served by natural gas. This includes scaling up renewable sources to reduce carbon, while backing up those sources with the flexibility, scale and reliability of natural gas,” added Williams’ CEO.

Additionally, the company is committed to leveraging its expertise and assets to advance the potential development of a hydrogen energy economy. To this end, the firm partnered with two regional hydrogen hubs – one in the Pacific Northwest and the other in Appalachia – which the U.S. Department of Energy recently selected for investment and development.

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The Pacific Northwest Hydrogen Hub is focused on reducing the emissions of hard-to-abate sectors such as transportation, energy storage, ports, agriculture, and industrial operations. Williams was named as a sub-recipient of DOE funding and plans to build hydrogen pipelines to safely and reliably transport clean hydrogen to advance the decarbonization of key energy consumers.

On the other hand, the Appalachian Clean Hydrogen Hub intends to leverage the region’s access to low-cost natural gas to produce low-cost clean hydrogen and permanently and safely store associated carbon emissions. The hub will include the development of hydrogen pipelines, multiple hydrogen fueling stations, and permanent CO2 storage to drive down the cost of hydrogen distribution and storage.

As part of the DOE program, Williams intends to leverage its footprint and partnership opportunities in the region where it has a large natural gas gathering, processing, and transportation presence.