Williams Cos. explores growth opportunities in carbon capture, certified gas

Williams Cos. Inc. moved further into emerging markets for certified natural gas and carbon capture and storage in the third quarter, leveraging its sizable footprint in U.S. natural gas gathering and delivery, the company said.

"We'll be taking the CO2 that today is vented in the basin into the pipeline, and we'll also be gathering CO2 from third parties," Williams Senior Vice President of Corporate Strategic Development Chad Zamarin said on the company's third-quarter earnings call Nov. 1. "We think that [these volumes] could increase over time."

With help from the Internal Revenue Code Section 45Q carbon-capture-and-storage tax credit embedded in the Inflation Reduction Act, the company pushed ahead with a key component of its Louisiana Energy Gateway project, a network of pipelines dedicated to providing some 1.8 Bcf/d in clean gas gathering and delivery for certified production out of the Haynesville shale. Under an agreement with PennEnergy Resources LLC, Williams plans to build 50 miles of new CO2 pipeline, along with a new treating facility, compression and carbon capture equipment.

The project's design allows for the sequestration and permanent underground storage of up to 2 million tonnes of CO2 annually. The agreement provided for an independent third-party certification process to verify emissions reductions credibly and transparently. Williams executives said the project could enter service as soon as fourth-quarter 2024.

As part of Williams' so-called "wellhead-to-water strategy," the company also continued to build out its U.S. Gulf Coast gas transport and storage infrastructure in the third quarter, with a $423 million purchase of NorTex Midstream Partners LLC. The acquisition bolted on 77 miles of pipelines and about 36 Bcf of storage serving the Dallas-Fort Worth metro area. The assets serve about 4 GW of gas-fired power generation in the region.

Along with an earlier acquisition of Trace Midstream Partners LLC's Haynesville infrastructure, Williams will integrate the NorTex assets into a clean-energy value chain along the U.S. Gulf Coast, which combines about 110 Bcf in regional storage with Transcontinental Gas Pipe Line Co. LLC's expansive delivery network.

Executives said they hope the addition of certified natural gas molecules from the Haynesville will make Williams a formidable player in the Gulf Coast region's evolving market for responsibly sourced gas. Certified gas, also called responsibly sourced gas, meets intensity thresholds for planet-warming emissions with an emphasis on methane and other environmental, social and governance standards.

A favorable ruling from the Federal Energy Regulatory Commission for Transco's Washington storage facility in Louisiana, issued in late October, boded well for the company's strategy, executives said. With authorization from FERC, Williams will go ahead with the imposition of market-based rates at the facility, allowing the company to charge liquefied natural gas, power generation and other customers a competitive rate for storage.