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Williams' (WMB) Atlantic Sunrise Receives Court Clearance

Production and pipeline major, The Williams Companies, Inc. WMB recently received clearance from a U.S. federal appeals court to move ahead with the construction of Atlantic Sunrise natural gas pipeline worth almost $3 billion. The pipeline, which will connect Pennsylvania to South Carolina, will enable Williams Companies to transport Marcellus shale gas across the eastern region of the United States.

Williams Companies expects the construction of the pipeline, which will be an expansion of the Transco system, to be completed by mid-2018. The pipeline will have a transportation capacity of around 1.7 billion cubic feet of gas per day (bcf/d). It will move Marcellus shale gas from Pennsylvania to the rest of the country. The company expects the pipeline to add value to its existing energy infrastructure, which will provide it with a steady flow of revenues in the future. It will also help citizens to receive affordable clean energy source as well as contribute to the economic growth of the country.

At the beginning of this week, environmentalists appealed to the court for a stay of construction, which has now been overruled as the opponents of the pipeline could not gather satisfactory facts. The stay of construction could have potentially put 8,000 jobs at risk. The company intends to resume construction of the gas pipeline soon. Cabot Oil & Gas Corporation COG is one of the companies expected to use the pipeline once construction is complete. IT has already secured 1 bcf/d gas transport capacity on the pipeline.

About Williams Companies

Tulsa, Oklahoma-based Williams Companies is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing, and transportation of natural gas. With a widespread pipeline system, Williams Companies is one of the largest domestic transporters of natural gas by volume. Its facilities – gas wells, pipelines, and midstream services – are concentrated in the Northwest, Rocky Mountains, Gulf Coast, and Eastern Seaboard.

Williams Companies assets include general partner interests and limited partner interests in Williams Partners, L.P. WPZ - an energy master limited partnership. The company derives most of its cash flow from its 74% ownership of Williams Partners. This includes assets that help in the gathering, transportation, treating, and processing of natural gas, in addition to the fractionation and storage of natural gas liquids. However, we remain worried about volatile natural gas prices and Williams Companies' high debt level.

Price Performance

Williams Companies has lost 8.9% of its value year to date compared with 2.4% decline of its industry.

Zacks Rank and Stocks to Consider

Williams Companies currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the oil and energy sector is Braskem S.A. BAK. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Braskem’s 2017 earnings are expected to grow 12.1% year over year. The company delivered a positive earnings surprise of 68.5% in the second quarter of 2017.

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Williams Partners LP (WPZ): Free Stock Analysis Report
 
Braskem S.A. (BAK): Free Stock Analysis Report
 
Williams Companies, Inc. (The) (WMB): Free Stock Analysis Report
 
Cabot Oil & Gas Corporation (COG): Free Stock Analysis Report
 
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