EnCap Flatrock Midstream LP has signed an agreement to sell M6 Midstream LLC (Momentum Midstream) to The Williams Companies Inc for up to $5.5 billion.
“The sale of M6 is one of the most significant private midstream transactions in the U.S., producing strong results for our investors”, Billy Lemmons, founder of Momentum financial sponsor EnCap Flatrock, said in a statement.
M6’s Haynesville assets will give Williams over 4,000 miles of natural gas gathering and transmission pipelines, more than one million dedicated acres supplying Gulf Coast hubs including Bethel, Carthage and Silsbee in east Texas and Gillis in southwest Louisiana, according to EnCap Flatrock.
“M6’s assets provide approximately 6 Bcfd [billion cubic feet a day] of system capacity to over 140 customers including 34 industrial end-users, 26 power plants, 16 city gates and 10 LNG facilities”, it noted.
Williams said separately the acquisition will expand its “fully integrated natural gas infrastructure platform in one of the nation’s most important supply basins serving growing Gulf Coast LNG, power and industrial demand”.
Williams plans to pursue two expansion projects to complement the new assets.
“As part of the acquisition, the Delta Access expansion along the Transco corridor will serve growing LNG and power demand. The $1.5 billion project will provide initial capacity of 2.25 Bcfd, with future expansion opportunities and is expected to come online in the first quarter 2029”, it said.
“Enhanced through the acquisition, the Shelby Trough Connector is an expansion of our LEG system into the growing Shelby Trough area of the Haynesville. The project will provide 750 MMcfd [million cubic feet per day] of initial capacity with expansion potential up to 1.5 Bcfd and includes a new lateral and additional compression facilities. It is expected to enter service in the second quarter of 2028”.
“The acquisition and the announced pipeline projects deepen Williams’ exposure to long-term natural gas demand growth, including Gulf Coast LNG demand projected to increase by approximately 20 Bcfd over the next 10 years”, Williams added.
The transaction price consists of around $3.5 billion in cash and assumed debt plus around $2 billion of Williams equity.
Williams had $3.12 billion in current assets including $203 million in cash and cash equivalents at the end of the second quarter. Current liabilities totaled $6.55 billion including a $2.2 billion portion of long-term debt due within a year.
“The company now expects 2026 adjusted EBITDA of $8.3 billion to $8.5 billion and growth capex between $7.3 billion and $7.9 billion”, Williams said. “Including the pro-forma impact of adjusted EBITDA from the Momentum acquisition for the last four quarters, Williams’ updated leverage ratio midpoint for 2026 is now approximately 3.75x”.
The transaction is subject to customary conditions including federal antitrust clearance, it said.