Capex in 1Q15
Williams Partners’ capex (capital expenditure) for 1Q15 was $735 million—1.5% higher compared to $724 million in 1Q14. The capex for the Atlantic-Gulf segment increased by 100.6% to $361 million. The company is expanding major pipelines’ capacity—including the Atlantic Sunrise, Leidy Southeast, and Constitution Pipeline.
Capex outlook for the rest of fiscal 2015
Williams Partners expects the total capex for the rest of 2015 to be ~$3,955 million. This includes $430 million for maintenance expenditure and $3,525 million for expansion. Williams Partners plans to generate the required funds from borrowings under debt agreements and through the issuance of additional equity and debt securities.
Major expansion projects
The company plans to expand its gathering infrastructure in the Eagle Ford, Mid-Continent, Utica, and Marcellus Shale regions. It plans to increase the processing capacity of the Oak Grove facility by adding a second 200 million cubic feet per day natural gas processing plant by 2016.
Williams Partners also plans to expand Transco’s existing natural gas transmission system. It plans to upgrade its Redwater facility. It provides NGL (natural gas liquid) transportation and fractionation services.
Key ETFs and stocks
Some of the MLPs (master limited partnerships) that have allocated a substantial portion of capex for expansion in fiscal 2015, including Williams Partners (WPZ), are Enterprise Product Partners (EPD), EQT Midstream Partners (EQM), and Western Gas Partners (WES). These MLPs have a combined weight of 25.6% in the Alerian MLP ETF (AMLP).
In the next part of this series, we’ll look at Williams Companies’ (WMB) acquisition of Williams Partners.