Williams Cos. (NYSE: WMB) Invests in Pipeline Venture

Brian Hicks

Written By Brian Hicks

Posted December 17, 2012

After Chesapeake Energy (NYSE: CHK) departed from the Access Pipeline project, Williams Cos. (NYSE: WMB) has decided to invest $2.4 billion into the project.

Project partners include Access Midstream Partners LP (NYSE: ACMP), of which Williams will acquire a 25 percent stake, and its general partner, of which it will obtain a 50 percent stake.

Global Infrastructure Partners holds the other 50 percent of Access’ general partner and 43 percent of limited partnership units.

Under CEO Alan Armstrong, Williams has moved into harvesting fuel directly from shale gas fields and transporting it to facilities for refinement. Williams acquired Caiman Energy LLC’s Marcellus pipelines in a $2.5 billion deal earlier this year.

From Bloomberg:

The Access agreement “allows us to get very large-scale positions in basins as opposed to having to go in and get struggling positions in basins and try to build those up,” Armstrong said during a conference call with analysts yesterday.

Access, due to its structure as a master-limited partnership, does not pay federal income taxes provided it pays most of its cash to shareholders. Through the deal, Williams receive an increasing cash flow from the general partner and dividends on common units from Access.

Williams has been doing well as far as dividends are concerned. Per Bloomberg, they’ve averaged an increase of 26 percent in the past five years and 54 percent over last year.

Williams was up 0.94 percent on Monday morning to $31.78. The company has lost more than 3 percent this year.

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