Williams CEO Not Interested in Acquisition of Utility Companies
HOUSTON (Reuters) — U.S. energy firm Williams Companies is not interested in three utilities recently bought by Canada's pipeline operator Enbridge as the return rate would be too low, CEO Alan Armstrong said on Wednesday.
Enbridge said this week it will buy East Ohio Gas, Questar Gas, and Public Service Co. of North Carolina from Dominion Energy for $14 billion including debt, creating North America's largest natural gas provider and doubling its gas distribution business.
"When we look at our use of equity in a transaction like that ... that kind of lower return does not make much sense for us," Armstrong said at the Barclays CEO Energy-Power Conference in New York.
The natural gas pipeline company already has high-yielding investment opportunities, Armstrong said.
Many companies are taking advantage of grant funding from the Department of Energy for electrification projects at facilities, including ports and airports. That, along with the electrification of vehicles, are expected to drive power demand, the CEO said.
"Natural gas, and in particular pipeline and storage capacity, will be the beneficiary of that continued electrification," Armstrong said.
The shift away from coal to gas for power generation in the states where Williams operates will result in the need for an additional 4.6 billion cubic feet per day (bcf/d) of gas, he added.
Considering the volume of gas it transports and the pipeline capacity it has, and not the price of natural gas, Williams expects strong revenue growth from its existing and future projects with robust dividend yields, Armstrong said.
Front-month gas futures for October delivery fell 7.8 cents, or 3%, on Wednesday morning, to $2.504 per million British thermal units (MMBtu), putting the contract on track for its lowest close since Aug. 23.
Williams is working on increasing its pipeline network to transport even more gas to U.S. customers, including producers of liquefied natural gas, Armstrong said.
Related News
Related News
![](/media/2035/pgj-enews-graphic-300x1404.jpg)
- Mexican President: Billionaire Slim Interested in Pemex Natural Gas Project
- Freeport LNG Sues Three Contractors Over Defects at Texas Plant
- Energy Transfer Adds 6,000 Miles of Pipeline with $3.25 Billion WTG Midstream Acquisition
- FERC Approves Transco's Texas to Louisiana Gas Pipeline Project
- Williams Says Court Rules in Its Favor in Pipeline Dispute with Energy Transfer
- U.S. to Buy 4.5 Million Barrels of Oil to Replenish Strategic Petroleum Reserve
- Kurdish Oil Smuggling to Iran Flourishes
- U.S. Court Overturns Alaska Oil Lease Sale, Halting Energy Development
- Second Gas Pipeline Rupture in Texas’ Reeves County Raises Environmental Concerns
- Williams Begins Louisiana Pipeline Construction Despite Ongoing Legal Dispute with Energy Transfer
Comments