Williams reported record growth in 2022 and announced that by 2025, it expects its Gulf of Mexico projects adjusted EBITDA to double their 2021 numbers during the company’s Analyst Day on Feb. 21.
Williams saw a strong finish to 2022, delivering 20% growth from fourth-quarter 2021. Adjusted EBITDA increased by $291 million year-over-year from fourth-quarter 2021 to $1.774 billion. Adjusted fourth-quarter 2022 net income was $653 million, up 37% from 2021.
In the whole year, Williams saw record financial performance. Adjusted net income rose 34% from the previous year’s numbers, reaching $2.228 billion. Williams also saw record gathering volumes of 16.5 Bcf/d and contracted transmission capacity of 24.4 Bcf/, both increases from 2021.
Williams expects 3% growth in 2023, with earnings ranging from $6.4 billion to $6.8 billion and growth capex from $1.4 billion to $1.7 billion.
Some expected capital drivers for 2023 include three strategic acquisitions of NorTex Midstream, Trace Midstream’s Haynesville assets and MountainWest at attractive valuations. Williams also secured additional commitments on the Louisiana Energy Gateway project, which connects Haynesville production to growing Gulf Coast LNG markets.
Continued incremental growth projects on its Transco and Northeast Gathering & Processing businesses, as well as in the Haynesville and deepwater Gulf of Mexico regions, is expected to drive capital in 2023 as well.
Gulf of Mexico developments
Williams has six major projects underway in the Gulf of Mexico, each with a different customer: LLOG Explorations’s Taggart and Salamanca developments; Chevron’s Anchor and Ballymore developments; Beacon’s Shenandoah; and Shell’s Whale. The majority of these fields require no capital expenditure on Williams’ behalf.
The Taggart project, which is 100% operated by LLOG, is anticipated to come online within the next few weeks, as first flow is expected in first-quarter 2023. Williams reached a tieback agreement with LLOG back in June of 2020 to provide offshore natural gas gathering and production handling services, as well as onshore gas treatment and processing. Combined reserves are approximately 32 MMboe, with oil being 16 Mbbl/d and gas being 35 MMcf/d.
The Salamanca project, also operated by LLOG, is expected to come online in the second quarter of 2025. The Salamanca project will handle production from the Leon and Castile fields and will be tied back to the KCC pipeline. Williams will provide deepwater natural gas infrastructure to LLOG, who will then construct, own and operate the tieback. Gas reserves are expected to be 89 Bcf, while gas is expected to yield 20 MMcf/d. Repsol and Beacon also have ownership in the project.
Anchor is a project owned by both Chevron and TotalEnergies, with operator Chevron owning 63%. Williams will leverage its existing footprint and system capabilities to provide offshore natural gas transportation services to the development. First flow of the project is expected in the second quarter of 2024. Gas reserves are expected to be 75 Bcf, while gas is expected to yield 25 MMcf/d.
Ballymore is another project owned by both Chevron and TotalEnergies, with operator Chevron holding 60% ownership. Williams will provide offshore natural gas gathering and crude oil transportation services as well as onshore natural gas processing services for the production.
The project, which is one of the larger deepwater developments in the Gulf, has combined reserves of about 300 MMboe, with oil production estimated at 75 Mbbl/d and gas production at 50 MMcf/d. First flow is expected in the first half of 2025.
Chevron’s Ballymore Project Makes Steady Progress
The Shenandoah project is expected to come online in fourth-quarter 2024. The project is owned and operated by Beacon, who holds a 31% working interest in the field. ShenHai and HEQ are the other companies with interest in the project, holding 49% and 20% interests, respectively. Williams will provide offshore natural gas gathering and transportation services, as well as onshore natural gas processing services to the Shenandoah development through the Discovery infrastructure in the Gulf. Gas reserves at the project are 380 Bcf, with gas production expected to reach 104 MMcf/d.
Shell’s Whale development is expected to be a major capital driver in the coming year. First flow is expected in fourth-quarter 2024 with combined reserves of 545 MMboe. Oil is expected to reach 100 Mbbl/d, while gas is expected to reach 200 MMcf/d. Williams will provide offshore natural gas gathering and crude oil transportation services for the development. Capital is expected to be less than $450 million, with Williams already having spent 65% of that goal.
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