Williams: Bulks Up Storage Business to Serve LNG Markets With Hartree Partners Transaction

Williams announced it has agreed to acquire 115 billion cubic feet of natural gas storage capacity and related assets from Hartree Partners for $1.95 billion. We consider the valuation fair at a 10 times 2024 EBITDA multiple and do not expect to change our $36 fair value estimate or narrow moat rating. The storage assets are extremely well located in Louisiana and Mississippi for serving Gulf Coast liquefied natural gas demand and include connections to Williams’ Transco network, which is reflected in the relatively high multiple. As renewables increase as a percentage of the power generation mix, there is a corresponding need for new gas storage to serve as a backup battery, given renewables’ intermittency issues. The deal is expected to close in January 2024.