Williams Companies NYSE:WMB is reportedly moving closer to one of the largest acquisitions in its history as the natural gas pipeline operator is in advanced talks to buy Momentum Midstream for about $5.5 billion. The company is said to be finalizing an agreement with EnCap Flatrock Midstream, the private equity owner of Momentum, according to people familiar with the matter. A deal could be announced in about a week, although no final decision has been made and EnCap could still decide to keep the business.
The potential deal could give Williams a bigger role in the U.S. natural gas export chain at a time when LNG demand is becoming a major infrastructure driver. Williams already owns more than 30,000 miles of pipeline infrastructure, while Momentum operates around 4,000 miles of pipeline serving 10 LNG facilities and 26 power plants. The acquisition would add more capacity to move gas from the Haynesville fields in East Texas and Northern Louisiana toward export terminals on the U.S. Gulf Coast.
Momentum has built its position by acquiring assets across East Texas and Louisiana, making it a strategic fit for Williams as U.S. LNG exports are expected to roughly double by the end of the decade. Williams shares closed up 0.5% at $77.92 on Friday in New York trading, giving the company a market value of about $95 billion. Representatives for Williams and EnCap Flatrock Midstream did not respond to requests for comment, and the talks could still change before any final agreement is signed.