Williams to buy Momentum Midstream for $5.5 billion, raises 2026 outlook

Williams agreed to buy Momentum Midstream for up to $5.5 billion, expanding its Haynesville shale network to feed Gulf Coast LNG and power demand, and raised its 2026 profit outlook.

"Williams is built to execute across multiple growth opportunities at once, and this quarter demonstrated the strength of that balanced approach," Chad Zamarin, president and chief executive officer at Williams, said.

The Tulsa, Oklahoma-based pipeline operator will pay about $3.5 billion in cash and assumed debt plus roughly $2 billion in Williams equity, at an implied valuation of about 8.5 times projected 2027 EBITDA. Momentum adds more than 4,000 miles of pipe and over 1 million dedicated acres across four gathering areas with combined capacity of 6 billion cubic feet per day, plus three take-or-pay pipelines able to move 4.05 Bcf/d.

The deal deepens Williams' exposure to Gulf Coast LNG demand projected to rise about 20 Bcf/d over the next decade and is expected to be accretive to both available funds from operations per share and earnings per share. Williams now expects 2026 adjusted EBITDA of $8.3 billion to $8.5 billion, up from a prior midpoint of $8.2 billion, with growth capex of $7.3 billion to $7.9 billion.

Record quarter funds the expansion

Williams reported second-quarter adjusted EBITDA of $1.921 billion, up 6 percent from $1.808 billion a year earlier, driven by transmission and Gulf Coast expansions, higher natural gas storage revenues and strong gathering performance. Net income rose to $827 million, or 68 cents a share, from $546 million, or 45 cents, a year earlier. Adjusted earnings per share came in at 50 cents, up from 46 cents, while available funds from operations climbed to $1.45 billion from $1.317 billion. Dividend coverage stood at 2.26 times.

The company's Power Innovation platform, including the first phase of its Socrates project completed on budget and on time and a joint venture with Blackstone, is ramping as customers seek fast, reliable power. Williams also signed customer agreements for Transco's Leidy Access and Garden Connector expansions and upsized the Transco Power Express project.

Momentum deepens Haynesville reach

Alongside the acquisition, Williams announced an expansion of its LEG gathering system and a large take-or-pay pipeline project along the Transco corridor. The Momentum platform's predictable, fee-based cash flows, supported by fixed-fee earnings and take-or-pay contracts, underpin the deal's long-term value, the company said.

The transaction is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act. BofA Securities acted as lead financial advisor to Williams, with Truist Securities also advising; Davis Polk & Wardwell served as legal counsel.

Including the pro-forma impact of Momentum's adjusted EBITDA for the last four quarters, Williams' updated leverage ratio midpoint for 2026 is about 3.75 times. The company's debt-to-adjusted EBITDA stood at 3.67 times at the end of the second quarter, down from 3.80 times a year earlier.

The acquisition follows Williams' 2025 purchases of Rimrock and Saber midstream assets and its investment in Cogentrix, part of a broader push to consolidate natural gas infrastructure as U.S. LNG export capacity expands. The last time Williams made a deal of comparable scale was its 2021 acquisition of Sequent Energy Management, which added gas marketing and storage assets. If the Momentum deal clears antitrust review, the combined platform would position Williams to capture a larger share of the roughly 20 Bcf/d of new Gulf Coast LNG demand expected by 2036, while the take-or-pay structure shields cash flows from commodity price swings.

This article is for informational purposes only and does not constitute investment advice.