Penn State Natural Gas Utilization Conference Jeremy Zeman, Manager of Commercial Development October 14, 2014

Transcription

1 Penn State Natural Gas Utilization Conference Jeremy Zeman, Manager of Commercial Development October 14, 2014

2 Forward Looking Statements page 1 of 2 The reports, filings, and other public announcements of The Williams Companies, Inc. (Williams) and Williams Partners L.P. (WPZ) may contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are "forwardlooking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of You typically can identify forward-looking statements by various forms of words such as anticipates, believes, seeks, could, may, should, continues, estimates, expects, forecasts, intends, might, proposed, goals, objectives, targets, planned, potential, projects, scheduled, will, assumes, guidance, outlook, in service date or other similar expressions. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management and include, among others, statements regarding: The levels of dividends to Williams stockholders; Expected levels of cash distributions by Access Midstream Partners, L.P. ( ACMP ) and WPZ with respect to general partner interests, incentive distribution rights, and limited partner interests; Amounts and nature of future capital expenditures; Expansion and growth of our business and operations; Financial condition and liquidity; Business strategy; Cash flow from operations or results of operations; Seasonality of certain business components Natural gas, natural gas liquids, and olefins prices, supply, and demand; and Demand for our service; and The proposed merger of ACMP and WPZ (the Proposed Merger). Forward-looking statements are based on numerous assumptions, uncertainties and risks that could cause future events or results to be materially different from those stated or implied in this presentation. Many of the factors that will determine these results are beyond our ability to control or predict. Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include, among others, the following: Whether WPZ, ACMP, or the merged partnership will produce sufficient cash flows to provide the level of cash distributions we expect; The structure, terms, timing and approval of the Proposed Merger, including as to be negotiated by the conflicts committees of ACMP and WPZ; Whether Williams is able to pay current and expected levels of dividends; Availability of supplies, market demand, and volatility of prices; 2 Penn State Natural Gas Utilization Conference October 14, 2014

3 Forward Looking Statements page 2 of 2 Inflation, interest rates, and fluctuation in foreign exchange rates and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on customers and suppliers); The strength and financial resources of our competitors and the effects of competition; Whether we are able to successfully identify, evaluate and execute investment opportunities; Our ability to acquire new businesses and assets and successfully integrate those operations and assets, including ACMP s business, into our existing businesses as well as successfully expand our facilities; Development of alternative energy sources; The impact of operational and developmental hazards and unforeseen interruptions; The ability to recover expected insurance proceeds related to the Geismar plant; Costs of, changes in, or the results of laws, government regulations (including safety and environmental regulations), environmental liabilities, litigation, and rate proceedings; Williams costs and funding obligations for defined benefit pension plants and other postretirement benefit plans sponsored by its affiliates; WPZ s allocated costs for defined benefit pension plans and other postretirement benefit plans sponsored by its affiliates; Changes in maintenance and construction costs; Changes in the current geopolitical situation; Exposure to the credit risk of our customers and counterparties; Risks related to financing, including restrictions stemming from debt agreements, future changes in credit ratings and the availability and cost of capital; The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate; Risks associated with weather and natural phenomena, including climate conditions; Acts of terrorism, including cybersecurity threats and related disruptions; and Additional risks described in our filings with the Securities and Exchange Commission (SEC). Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement, we caution investors not to unduly rely on our forward-looking statements. We disclaim any obligations to and do not intend to update the above list or announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments. In addition to causing our actual results to differ, the factors listed above may cause our intentions to change from those statements of intention set forth in this announcement. Such changes in our intentions may also cause our results to differ. We may change our intentions, at any time and without notice, based upon changes in such factors, our assumptions, or otherwise. Investors are urged to closely consider the disclosures and risk factors in Williams and WPZ s annual reports on Form 10-K filed with the SEC on Feb. 26, 2014, and each of our quarterly reports on Form 10-Q available from our offices or from our websites at and 3 Penn State Natural Gas Utilization Conference October 14, 2014

4 Important Information This document does not constitute an offer to buy or solicitation of an offer to sell any securities. This document contains information related to a proposal which The Williams Companies, Inc. has made for a business combination transaction of Williams Partners L.P. ("WPZ") and Access Midstream Partners, L.P. ("ACMP"). In furtherance of this proposal and subject to future developments, ACMP may file a registration statement with the SEC. INVESTORS ARE URGED TO READ THE REGISTRATION STATEMENT, AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC by WPZ or ACMP through the website maintained by the SEC at 4 Penn State Natural Gas Utilization Conference October 14, 2014

5 Agenda > Williams overview > Williams activities in the region > Large scale challenges: volume and infrastructure > What it takes to build the necessary infrastructure > Example route selection 5 Penn State Natural Gas Utilization Conference October 14, 2014

6 Williams 6 Penn State Natural Gas Utilization Conference October 14, 2014

7 Williams value chain in North America Market Hub >20% U.S. Dry-Gas Volumes Touch Our Systems Transmission Pipelines and Storage Natural Gas End User Ethylene Propylene Wellhead (onshore and offshore) Gas Gathering Mixed Natural Gas Gas Processing Liquids Plants Fractionation Facilities Multiple Products Storage Transmission Pipelines Olefins Plant Market Hub End User WPZ ACMP 11.0 Bcf/d 7.8 Bcf/d 475 Mbbl/d crude oil 7 Bcf/d inlet 418 Mbbl/d 231 Mbbl/d 22 MMbbl 386 (lbs/year) Mbbl/d 1,900 MM ethylene Figures represent 100% capacity for operated assets, including those in which Williams, WPZ and ACMP have a share of ownership; NGL and derivatives storage includes capacity owned and under long-term lease; olefins-plant volumes are inclusive of Geismar, La., facility at full operation and expansion. 815 MM propylene 395MM lbs ethylene storage 24 storage customers 7 exchange partners 7 Penn State Natural Gas Utilization Conference October 14, 2014

8 Agenda > Williams overview > Williams activities in the region > Large scale challenges: volume and infrastructure > What it takes to build the necessary infrastructure > Example route selection 8 Penn State Natural Gas Utilization Conference October 14, 2014

9 Delivering Large-Scale Infrastructure to the Marcellus & Utica MARCELLUS & UTICA SHALE OVERVIEW Marcellus (wholly owned or operated) Susquehanna Supply Hub (SSH) 2015* 3 Bcf/d takeaway capacity Laurel Mountain Midstream (LMM) 2015* ~700 MMcf/d gathering capacity Ohio Valley Midstream (OVM) 2015* 0.9 Bcf/d processing capacity ~80 Mbpd fractionation/de-ethanization Access Midstream Partners 2015* 3 Bcf/d estimated exit rate Three Rivers Midstream (TRM) 248,000 dedicated acres Utica (partially owned, non-operated) Blue Racer Midstream 2015* 1.5 Bcf/d gathering capacity 0.6 Bcf/d processing capacity ~126 Mbpd fractionation capacity Access Midstream Partners 2015* 1 Bcf/d (operated) gathering exit rate 1.1 Bcf/d processing capacity ~135 Mbpd fractionation capacity Represents estimated in-service dates and estimated capacity at respective year end. LMM, Blue Racer and Access Midstream Partners Utica are partially owned systems; amounts shown reflect 100%. 9 Penn State Natural Gas Utilization Conference October 14, 2014

10 Agenda > Williams overview > Williams activities in region > Large scale challenges: volume and infrastructure > What it takes to build the necessary infrastructure > Example route selection 10 Penn State Natural Gas Utilization Conference October 14, 2014

11 Natural gas supply growth CAGR 3% % +9.5 Bcf/d CAGR 3% % Bcf/d Source: Wood Mackenzie North America Gas Service. Note: Excludes Canadian import volumes of approximately 4.5 Bcf/d (at 2014 levels). 11 Penn State Natural Gas Utilization Conference October 14, 2014

12 Horsepower HP and pipeline statistics 200, , , , ,000 70,538 83,160 78,228 69,054 78,560 97,857 50,000 37,346 45,924 24,828 24, Total HP mid 2014 OVM LMM SSH 12 Penn State Natural Gas Utilization Conference October 14, 2014

13 HP and pipeline statistics Region Year End 2010 Year End 2011 Year End 2012 Year End 2013 Mid 2014 Mileage % Growth Susquehanna Supply Hub % Laurel Mountain Midstream 1,000 1,386 2,013 2,044 2, % Ohio Valley Midstream % Total Miles 1,000 1,461 2,305 2,495 2, % 13 Penn State Natural Gas Utilization Conference October 14, 2014

14 Agenda > Williams overview > Williams activities in the region > Large scale challenges: volume and infrastructure > What it takes to build the necessary infrastructure > Example route selection 14 Penn State Natural Gas Utilization Conference October 14, 2014

15 What it takes to build the necessary infrastructure In areas where infrastructure is limited, planning is a must > Iterative approach > Customer drilling plans, driven by customer s: Expectation of commodity pricing Resources and cost structure Application of drilling/production experience > Hydraulic analysis > Interstate takeaway capacities > Working with existing and new landowners > Working with regulatory authorities > Partnering - contractors and vendors 15 Penn State Natural Gas Utilization Conference October 14, 2014

16 Agenda > Williams overview > Williams activities in region > Large scale challenges: volume and infrastructure > What it takes to build the necessary infrastructure > Example route selection 16 Penn State Natural Gas Utilization Conference October 14, 2014

17 Route selection > Engineering, environmental and social concerns > GIS technology Pipeline Router Heat map of the install cost A B 17 Penn State Natural Gas Utilization Conference October 14, 2014

18 How Pipeline Router Works > 17 input variables Dwellings, Slope, Geology, Transportation, Wetlands, Protected Lands, Existing Pipelines, Parcels, Leases, Hydrology, Mining, Existing ROW, etc. > Variables are ranked from 0 to 5 > Data layers ranked, weighted and summed into one Cost Surface Penn State Natural Gas Utilization Conference October 14, 2014

19 Pipeline router > Slope example Penn State Natural Gas Utilization Conference October 14, 2014

20 Pipeline router > Summing the variables (example of slope and land use) 20 Penn State Natural Gas Utilization Conference October 14, 2014

21 Pennsylvania cost surface 21 Penn State Natural Gas Utilization Conference October 14, 2014

22 How Pipeline Router Works Pipeline Routing > Cost Distance and Least Cost Path Visual Explanation B A 22 Penn State Natural Gas Utilization Conference October 14, 2014

23 Thank you 23 Penn State Natural Gas Utilization Conference October 14, 2014