Williams chief sees opportunity amid challenges

Natural gas infrastructure company Williams added 3 Bcf/d (85mn m³/d) of primarily power generation demand to its midstream system last year and expects demand for gas-fired power to drive more expansions, chief executive Alan Armstrong said.

Moving gas to markets with high demand typically involves constructing pipelines in heavily populated areas, amid robust opposition from environmental groups and regulatory agencies.

One of Williams' more challenging demand-side projects of late was the 443mn cf/d Dalton expansion project, a conduit for gas south of Atlanta, Georgia, moving up to the Tennessee-Georgia border that came on line last year.

"Atlanta has sprawled all the way into Tennessee, and there were a lot of heavily populated areas that we had to traverse with large-diameter pipeline. It was a bad combination of difficult terrain and population," Armstrong told Argus on the sidelines of the Argus North American Natural Gas Markets conference in Houston. "[This is a] big difference from building in west Texas where it is flat and nobody is home but the mesquite."

Williams has been battle-tested from decades of expanding its footprint. Armstrong said other midstream companies who had never built in the northeast have questioned Williams' slow and deliberate planning processes.

"They were saying ‘you guys are making this too hard, we can get a pipeline built in a year'," he said. "And lo and behold, they had their struggles because they just did not have the experience."

Armstrong said Williams is facing a regulatory setback in the region as a result of politics. The company's 400mn cf/d Northeast Supply Enhancement (NSE) project was recently denied a 401 water certificate by the New York Department of Environmental Conservation (DEC). The same agency denied a 401 certificate to Williams' 628mn cf/d Constitution pipeline in 2016, leaving that project in legal limbo.

Williams has submitted a new application for NSE's water certificate, and Armstrong saidhe hopes it will be approved once the Democratic primary election for governor of the state of New York is over.

But Armstrong said he expects an interesting political dynamic to come into play with NSE, as the project is primarily aimed at providing low-cost natural gas to residents of the New York Housing Authority, a government agency which provides housing for low- and moderate-income residents throughout the five boroughs of New York City.