Williams to add natural gas storage in US Gulf Coast; nears first data center deal

US midstream company Williams will expand its Pine Prairie natural gas storage facility by 10 Bcf and added two new expansions on the Northwest Pipeline to its project list, the company said Feb. 13.

The storage expansion at the salt dome facility "will support industrial, power generation and LNG demand for natural gas," CEO Alan Armstrong said on an earnings call.

Pine Prairie is one of six storage sites Williams acquired in 2024, four of which were salt cavern sites. The company was exploring 10 Bcf expansions at all four of the salt sites, executives said last year.

The company is also exploring expansions further west. It recently completed an expansion at the Clay Basin facility to add 7.8 Bcf of interruptible capacity.

"Hopefully, we can convert that to firm storage at some point in the future with some pretty nominal investment on our part," chief operating officer Micheal Dunn said. "It looks to us now that prices have come up, especially in the Gulf Coast area where we can accomplish these brownfield storage expansions."

Northwest Pipeline expansions

The company is now working on six expansion projects on the Northwest Pipeline with a combined capacity of around 580 MMcf/d.

These include two new projects; the 87 MMcf/d Huntingdon Connector with a target in-service date in fourth-quarter 2026, and the 183 MMcf/d Kelso-Beaver Reliability Project, which is targeting a Q4 2028 start.

The other four projects are expected in service between Q4 2025 and Q4 2027, the company said in an investor presentation. Three of those were announced in its previous earnings call.

"These are a clear indication of the incremental needs for natural gas consumption in the Northwest that seems to be gaining momentum," Armstrong said. "We've just been really surprised with the amount of continued demand for capacity expansions out there."

Natural gas consumption in the Pacific Northwest has risen over the past decade. Consumption so far this winter has averaged over 2.9 Bcf/d, around 150 MMcf/d higher year over year, according to data from S&P Global Commodity Insights.

Data center project

Williams is closing in on its first project to directly supply a data center, Armstrong said. The project "has gone far enough to fully support us ordering all of the major equipment and long lead items."

One of the key constraints for data centers is likely to be power generation equipment, Armstrong said. "We've been very pleased with what we've been able to pull together in that regard... it helps that we're such large buyer of equipment already."

Williams replaced 92 aging compressor units on its system in 2024 as part of an emissions reduction program.

"The same drivers that are used for our large compressor systems are the same drivers that are used for power generation simple cycle turbines," Armstrong said. Data centers are likely to use simple cycle turbines because of their desire for speed to market, he said.

Williams reported a net income of $485 million for Q4 2024, down from over $1.1 billion in Q4 2023.