Pipeline giant Williams and its Williams Partners affiliate said Monday Williams Partners’ 2016 capital budget for growth was chopped by $1 billion – 33% — to $2 billion, Kallanish Energy learns.
Williams also said it’s maintaining its quarterly dividend at 85 cents a share. Williams Partners’ current yield is now 15%.
The sharp cut in 2016 capital and investment expenditures includes project deferrals, delays and cancellations due to current commodity prices and sharply higher costs of capital.
“Our strategy remains intact and the underlying fundamentals of our business are strong despite the slower growth rates producers currently face,” said Alan Armstrong, CEO of Williams Partners’ general partner. “Our revised capital plan addresses the realities of our current market environment while continuing to invest in the growing demand side of our business.”
The $2 billion growth capital funding needs include $1.3 billion for Transco (pipeline) expansions and other interstate pipeline growth projects, most of which are fully contracted with investment-grade customers.
Non-interstate pipeline growth capital funding needs total $700 million, primarily reflecting relatively modest additional investments across the partnership’s gathering and processing systems.
Capital spending for gathering and processing in 2016 will be limited to known new producer volumes, including wells drilled and completed awaiting connecting infrastructure, Williams said.
Note: Read all of the Kallanish Commodities Energy News which is published daily online, www.kallanishenergy.com. Kallanish also publishes a daily newsletter, and will be happy to add your name to the distribution list. Simply email .