FERC Tax Decision Forces Williams to Restructure – No More MLP
It appears a decision by the Federal Energy Regulatory Commission (FERC) earlier this year that strips away the main advantages of the tax-advantaged master limited partnerships (MLP) structure is causing the MLP to go the way of the dodo bird. Because of the Trump tax cut, in March FERC reversed a previous policy and will no longer allowed MLP interstate oil and gas pipelines to include an income tax allowance in their cost-of-service rates (see FERC Takes Aim at Adjusting Pipe Rates in Light of Trump Tax Cut). Not long after, Tallgrass Energy, owner of the Rockies Express Pipeline, announced they would phase out their MLP structure (see Tallgrass Energy Eliminating MLP – First “Casualty” of Tax Cut?). As we predicted, it was the first of many to do so. Williams is now the latest midstream company to dump its MLP. Williams is essentially two companies–Williams (the corporation) and Williams Partners (the MLP). The MLP owns most of the assets. Williams Partners will be no more and instead, all of the assets will now live under the Williams (corporation) umbrella. Which shouldn’t surprise anyone. Once upon a time Williams had plans to merge the two together–but that all got mothballed when they ended up first fighting against, then trying to merge with Energy Transfer Equity (see Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B). FERC’s action in March provided the motivation for Williams to move forward with phasing out the Williams Partners MLP, which will cost Williams (the corporation) $10.5 billion to do…
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In April MDN told you that the New York Dept. of Environment Conservation (DEC) had rejected a modest pipeline expansion proposal by Williams’ Transco Pipeline subsidiary (see 
Good news. The main part of the Atlantic Sunrise Pipeline project–where it runs through Lancaster County, PA–is almost finished. Atlantic Sunrise is a $3 billion, 198-mile pipeline project running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from northeastern PA with the Williams’ Transco pipeline in southern Lancaster County. The most opposition to the pipeline has happened in Lancaster County. Right now 90% of the pipeline has been welded in Lancaster County and sits above ground. By the end of July, all of it will be done and buried in the ground. It won’t be long after that that the entire 198 miles will begin to flow northeast PA Marcellus gas…
On Tuesday, the Federal Energy Regulatory Commission (FERC) granted Williams’ Transco Pipeline permission to reverse the flow along part of the pipeline to begin sending more Marcellus gas south. The order allows Transco to start up modified compressor stations in Maryland, Virginia and North Carolina, and to begin flowing an extra 150 million cubic feet per day (MMcf/d) of yummy Marcellus gas southward. Most of the time when we report on Atlantic Sunrise, we talk about the greenfield (brand new pipeline) being installed in 10 Pennsylvania counties. What’s often overlooked are other aspects of the project, like this one, that will kit out the Transco to flow 1.7 billion cubic feet per day of Marcellus gas to the south and to the Gulf Coast. The greenfield portion of the pipeline is due to be completed sometime soon–by “mid-2018.” This latest order allowing the startup of bidirectional flow along certain portions is an important part of the project…
One of the lawyers who filed a petition with the U.S. Supreme Court requesting the Supremes hear the Constitution Pipeline case has written a column that rips the mask off New York Gov. Andrew Cuomo and exposes him for the corrupt autocrat he is. The column is long and uses a number of legal references and arguments, but we can sum it up this way: (1) Cuomo has been caught admitting he has imposed an illegal moratorium on new pipelines; (2) Cuomo’s action in blocking the Constitution and other pipelines usurps federal authority; and (3) Cuomo’s actions in blocking pipelines threatens national energy security. It’s not often we get the inside thinking of one of the key players in a high-profile lawsuit. Read the following and learn…
Every three months publicly traded companies, including those with major operations in the Marcellus/Utica, issue a required quarterly update for stockholders. It’s often referred to as “earnings season.” We like to cull through the updates to share items of interest with MDN readers. For drilling companies we dedicate an entire post to each company. We typically don’t cover midstream (i.e. pipeline) companies as much. However, there are a number of important projects cooking with companies like Williams, MarkWest Energy (MPLX), Summit Midstream and Tallgrass (REX Pipeline). We culled through the press releases and analyst phone call transcripts to pick out comments and portions that we think are helpful in understanding where some of these important projects are, and how they impact the bottom line of said companies. Below is our 1Q18 midstream potpourri…
In January 2018, Williams, builder of the proposed Constitution Pipeline–124-mile pipeline from Susquehanna County, PA to Schoharie County, NY to move Marcellus gas into NY and New England–took their last, best shot at overturning a politically-based decision by the corrupt New York Dept. of Environmental Conservation (DEC) to deny the Constitution necessary water permits to build (see 
As we previously reported, someone(s) stole a bunch of dynamite and the blasting caps (used to ignite the dynamite) on the weekend of April 14-15 from a locked storage trailer sitting at an Atlantic Sunrise Pipeline construction site in Lancaster County, PA (see 
Pipeline companies are known for their largess in showering local schools, towns and nonprofit agencies with money for worthy causes. Among those who engage in this civic practice is Williams’ Atlantic Sunrise Pipeline project. Atlantic Sunrise is a $3 billion, 198-mile pipeline project running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from northeastern PA with the Williams’ Transco pipeline in southern Lancaster County, PA. In 2015, the Atlantic Sunrise Community Grant Program was established to benefit community organizations in communities within the Atlantic Sunrise footprint. Since 2015, the Atlantic Sunrise has doled out more than $2 million across the 10-county project area in support of noteworthy projects. And they’ve just done it again. A total of 41 PA organizations have just received a total of $264,300 in contributions–more than a quarter of a million dollars! We have the full list below, along with information about how your organization can apply for the next round…
We have an update to a story we first brought you yesterday, that someone(s) has stolen a bunch of dynamite and the blasting caps needed to detonate it from a construction site for the Atlantic Sunrise Pipeline in Lancaster County, PA (see 
In March the Federal Energy Regulatory Commission (FERC) issued a favorable draft environmental impact statement (DEIS) for the Williams Transco Northeast Supply Enhancement (NESE) pipeline project (see 
The hits keep comin’ from Williams. Yesterday Williams announced it has filed a request with the Federal Energy Regulatory Commission (FERC) to expand capacity along the mighty Transco Pipeline to increase the amount of gas the pipeline can flow to the Mid-Atlantic and Southeastern U.S by 296,375 dekatherms (296 million cubic feet) per day. The Southeastern Trail expansion project (SET), as it is called, includes building 7.7 miles of 42-inch pipeline looping (pipeline laid next to existing pipeline) in Virginia, adding extra horsepower at existing compressor stations in Virginia, and making some pipe and valve modifications on other existing facilities in South Carolina, Georgia, and Louisiana to allow for bi-directional flow. The project aims to bring more gas to utilities, including PSNC Energy, South Carolina Electric & Gas, Virginia Natural Gas, the City of Buford, Ga., and the City of LaGrange, Ga. Note that Mountain Valley Pipeline recently announced they want to expand the MVP project an extra 70 miles to serve PSNC Energy (in North Carolina) too. Williams is currently working to finish up the Atlantic Sunrise project, which includes new pipeline to feed Marcellus gas from northeastern PA into the Transco mainline. Bottom line: This new Southeastern Trail expansion project will bring Marcellus gas to more customers in the Mid-Atlantic and Southeastern U.S. And that’s a good thing!…