uploads///EBITDA Breakdown

Which Segments Drove Williams Partners’ 2Q15 Performance?


Aug. 17 2015, Updated 12:06 p.m. ET

Access Midstream

The Access Midstream segment was added to WPZ’s operating segments as a result of the WPZ-Access merger completed in February 2015. Access Midstream provides natural gas and liquid treating, compression, and gathering services. The segment’s 2Q15 adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) was $345 million.

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Atlantic Gulf

The Atlantic Gulf is Williams Partners’ (WPZ) largest business segment in terms of adjusted EBITDA. In 2Q15, this segment alone accounted for 39% of the company’s total EBITDA. The Atlantic Gulf segment mainly transports natural gas through the interstate natural gas pipeline, Transco. The segment also provides natural gas gathering and processing services.

The segment’s 2Q15 EBITDA rose by 44% YoY (year-over-year) driven mainly by higher fee-based revenue from its Gulfstar One and Transco expansion projects. The segment’s performance was offset by lower NGL (natural gas liquid) margins.

NGL & Petchem Services

The NGL & Petchem Services segment’s adjusted EBITDA fell by 80% YoY in 2Q15. In 2Q15 it fell mainly due to “lower commodity-related margins at the Canadian operations and higher operating expenses related to the Geismar plant ramp-up.” The Geismar started operating at almost its full capacity and the segment is expected benefit from this in the coming quarters.

EnLink Midstream (ENLK), Targa Resource Partners (NGLS), DCP Midstream Partners (DPM), MarkWest Energy Partners (MWE), and Crestwood Midstream Partners (CMLP) are among the midstream companies that also have exposure to NGL prices. Together, these companies account for ~30.93% of the Alerian MLP ETF (AMLP).

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Northeast G&P

Northeast G&P’s adjusted EBITDA grew by 21% YoY in 2Q15 over 2Q14. Northeast G&P operates in the Marcellus and Utica shale regions where it provides gathering and processing services. The segment’s performance was driven by higher fee-based throughput volumes at Ohio Valley Midstream. This was offset by lower volumes at the Susquehanna Supply Hub due to production cuts.

The West

The West segment’s adjusted EBITDA fell by 27% YoY in 2Q15. It was driven by lower NGL margins due to lower NGL prices. In the next part, we’ll look at Williams Partners’ outlook for the rest of 2015.


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