Williams Companies to Keep 2021 Growth Capex in Line with Last Year

Researched by Industrial Info Resources (Sugar Land, Texas)--Williams Companies Incorporated (NYSE:WMB) (Tulsa, Oklahoma) plans to keep its growth capital expenditures (capex) in the range of $1 billion to $1.2 billion this year, roughly in line with what it spent last year, executives with the natural gas processing and transmission firm said Tuesday. Citing headwinds such as the COVID-19 pandemic, the collapse in oil prices and depressed natural gas liquids (NGL) prices, along with an unusually active hurricane season, the company reported its net earnings for 2020 were less than one-fourth of what it earned in 2019.

Industrial Info is tracking nearly $4.8 billion worth of active Williams Companies projects.

Click on the image at right for a graph showing the company's project activity by state.

The company's guidance for this year also includes $400 million to $500 million in maintenance capex, compared with $393 million spent in 2020.

During Williams Companies' earnings conference call, executives said overall capital spending in 2020 was 40% less than what was spent in 2019.

Net income for 2020 was $208 million, compared with $862 million in 2019. For last year's fourth quarter, net income was $115 million, compared with $138 million in fourth-quarter 2019.

Last year was one "of unprecedented challenges for our industry and for our country," said Chief Executive Officer Alan Armstrong during the earnings conference call. Last year's results also were "significantly impacted by net impairment charges," the company said, resulting in a $1.54 billion pre-tax charge. Still, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were slightly higher in 2020 than in 2019.

Looking forward, Armstrong said about $900 million in capital spending is earmarked for Williams Companies' base business, including the Leidy South Expansion, a proposed expansion of Williams' existing Pennsylvania pipeline and compressor station infrastructure, which is designed to connect supplies of natural gas in northern and western Pennsylvania with growing demand centers along the Atlantic Seaboard. Industrial Info is tracking four related projects worth $142 million. Click here for the list.

Armstrong said some front-end funding is earmarked for the proposed Regional Energy Access (REA) expansion of the existing Transco pipeline system to deliver more natural gas to the Northeast by the 2023-2024 winter heating season. Industrial Info is tracking project activity worth $269 million that is tied to the REA expansion in Pennsylvania and New Jersey. Click here for the list of projects.

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