Williams Raises EBITDA View 6% on Power Projects, Momentum Deal

Williams Companies reported a 6% rise in second-quarter EBITDA, lifted its full-year guidance and detailed a growing power-infrastructure business that is drawing significant capital backing.

Second-quarter EBITDA came in at $1.92 billion, compared with $1.8 billion a year earlier, Chief Financial Officer John Porter said. Year-to-dat EITDA was up 10%. The company raised its full-year adjusted EBITDA forecast to a range of $8.3 billion to $8.5 bilion, reflecting stronger base-business performance and the expected contribution from its Momentum Midstream acquisition.

Chief Executive Chad Zamarin said Phase 1 of the Socrates Power Innovation project entered service last week, delivering 200 megawatts of utility-scale power to a customer. The phase was completed on time and within budget in less than 18 months from commercialization. Williams expects the next Socrates phase to go live before year-end. Chief Operating Officer Larry Larsen said the facility delivered initial power smoothly and should ramp toward full capacity during the month.

Williams is using Socrates as a proof point for its behind- the-meter power strategy aimed at data centers and other large users. Zamarin said the company remans in talks with multiple customers and expects to commercialize additional Power Innovation projects before the end of 2026. Future projects could incorporate faster deployment and greater scale, with hybrid structures to support grid expasion.

The company set up a Power Innovation financing joint venture with Blackstone that provides $5.34 billion of committed capital. The arrangement includes $4.4 billion for 49% of expected total growth capital expenditures and more than $900 million of additional consideration to Williams, Porter said. The capital carries a capped 6.35% cost of equity while letting Williams retain operatorship, key decision-making authority and upside participation. The partership includes a buyout option starting in 2033 at the remaining partner investment balance. Porter added that the additional consideration improves the expected cash-flow-to-invested-capital ratio for its five current Power Innovation projects by roughly 56% over the primary contract terms.

Williams announced the $5.5 billion acquisition of Momentum Midstream, funded with $3.5 billion in cash and debt and $2 billion of equity. Zamarin described it as an accretive bolt-on with an approximate 8.5-times multiple based on consolidated EBITDA, or about nine times when including noncontrolling interests. The deal adds roughly 6 billion cubic feet per day of gatherining capacity and more than 4 Bcf per day of take-or-pay pipeline capacity in East Texas and Louisiana, including the Shelby Trough area of the western Haynesville. Williams said the acquisition complements its Haynesville Gathering operations, Louisiana Energy Gateway pipeline and Transco Gulf Coast system. Management did not quantify operating or cost synergies. Zamarin said the overlapping footprints should create operational benefits, pointing to growth opportunities from existing and new customers, along with expansion projects.

Two infrastructure projects were announced alonside the acquisition. Shelby Connector will link Momentum's gatherining footprint to the Louisiana Energy Gateway system. It has initial customer commitments of up to 750 million cubic feet per day, is targeted for first-half 2028 service and could expand to 1.5 Bcf per day. Delta Access is a fully contracted pipeline running from the combined Momentum and Williams systems toward LNG and power customers along the Transco corridor. It is planned with initial capacity of 2.25 Bcf per day, targeted for early 2029 service and expandable to 3.5 Bcf per day. Zamarin said the projects fit within Williams' targeted build-return range and are expected to further improve the acquisition multiple over time.

Transmission and Gulf EBITDA increased $56 million, or about 6%, led by 23% growth in the company's Gulf businesses. Porter attributed that to recent Gulf expansion projects, while natural gas storage EBITDA also rose 23%. Williams also reported growth from Transco and MountainWest Pipeline expansion projects. Northeast gatherining and processing EBITDA grew $39 million, or 8%, mainly from rich-gas areas. The West segment rose $18 million, or about 5%, driven by Haynesville investments including Louisiana Energy Gateway. The Sequent marketing business performed modesty better than a year earlier; Porter noted that the second quarter typically offers lower seasonal opportunities. The other segment declined about $14 million, largely due to the January 2026 divestiture of upstream Haynesville assets.

Williams raised its long-term EBITDA growth target to more than 11% compounded annually through 2030 from a prior target of more than 10%. Porter said the updated target reflects Momentum and the newly announced projects while excluding additional power and pipeline opportunities. Management said it remains conservative on growth assumptions for certain legacy businesses, including the Northeast segment.

Year-end leverage is expected at about 3.9 times debt to EBITDA, based on an assumed three months of Momentum contribution. On a full-year run-rate basis, Porter said leverage would be about 3.75 times, leaving more than $2 billion of incremental capacity under the company's internal 4-times ceiling for additional near-term Power Innovation projects.

Williams Companies carries an Alpha Score of 53 out of 100, with a Mixed label. Its stock page is available here.