Which Segment Could Drive Williams Partners’ Q2 Performance



Williams Partners’ Atlantic Gulf segment

Williams Companies (WMB), which owns the GP (general partner) of Williams Partners (WPZ), has few business assets. But in this article, we’ll look at the recent performance drivers of Williams Partners’ operating segment. Williams Partners’ Atlantic Gulf segment is WPZ’s largest business segment in terms of adjusted EBITDA. It’s mainly involved in natural gas transportation, gathering, and processing. The segment’s 2Q17 performance is expected to be driven by expansion projects placed into service, which might be slightly offset by lower natural gas demand.

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Williams Partners’ NGL & Petchem Services segment

The NGL & Petchem Services segment is involved in olefins production, NGLs (natural gas liquids) transportation and marketing, and other midstream services. The segment’s 2Q17 performance could be impacted by Williams’ sale of its Canadian businesses. This impact might be slightly offset by higher olefins margins at the Geismar plant. The segment’s remaining business following the successful completion of Geismar plant sale and Canadian asset sale would be reported in West segment. Going forward, the partnership is expected to report only three segments as part of the earlier announced reorganizational plan.

Williams Partners’ Northeast G&P segment

The Northeast G&P provides natural gas gathering and processing services in the Northeast region, which includes the Marcellus and Utica shale regions. The segment’s performance in 2Q17 is expected to be driven by expansion projects placed into service and higher gathering volumes. We’ll discuss Williams Partners’ throughput volumes in the Marcellus region in the next part of this series.

Williams Partners’ West segment

The West segment, which now includes most assets of Williams Partners’ Central Segment, provides the following services.

  • natural gas transportation, gathering, and processing
  • NGL fractionation and transportation

The segment is expected to benefit from higher processing and fractionation margins due to higher crude oil and NGL prices in 2Q17 compared to 2Q16. NGL Energy Partners (NGL), DCP Midstream (DCP), and MPLX LP (MPLX) are among the midstream companies with exposure to NGL prices.

The above positive might be slightly offset by lower volumes along the segment’s Northwest Pipeline due to lower natural gas demand from utilities. About 76% of the pipeline’s firm contracts are with Utilities and LDCs (local distribution companies). Moreover, the segment’s gathering and processing volumes might be negatively impacted by lower natural gas production in some regions despite a recovery in drilling activity.


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