Which Williams Partners Segment Could Be Top Performer in 4Q17?



Atlantic Gulf segment

Williams Partners’ (WPZ) Atlantic Gulf segment is expected to benefit in 4Q17 from the Transco expansion projects placed into service. It’s also expected to benefit from strong processing margins and an increase in offshore gathering volumes. That could be slightly offset by higher operating and maintenance expenses, mainly due to projects placed into service.

Williams Partners placed five major Transco expansion projects by the end of 2017. They include Virginia Southside II, Hillabee Phase 1, Gulf Trace, Dalton Expansion, and New York Bay Expansion.

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West segment

Williams Partners’ West segment posted a 1.6% YoY (year-over-year) decline in adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) in 3Q17. The trend is expected to continue in the fourth quarter, driven by weak drilling activity in some regions, including the Eagle Ford Shale, the Barnett Shale, and the Niobrara shale. EnLink Midstream Partners (ENLK), Energy Transfer Partners (ETP), and Crestwood Equity Partners (CEQP) are among the midstream companies that have exposure to the Eagle Ford and Barnett shale regions.

The segment is also expected to see the impact of contract restructuring and the sale of its 50% interest in the DBJV (Delaware Basin Joint Venture) gathering system to Western Gas Partners (WES).

Northeast G&P segment

The Northeast G&P segment, which provides natural gas gathering and processing and NGL (natural gas liquids) fractionation services in the US Northeast region, was Williams Partners’ top-performing segment in 3Q17. The trend could continue in the fourth quarter. The segment is expected to benefit from the acquisition of an interest in two Marcellus gathering systems from WES and strong throughput volumes from the Northeast region. We’ll look more at that in the next part.


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