Williams Companies Q1 2025 Earnings Report

Williams Companies EPS Results

• Actual EPS: $0.60
• Consensus EPS: $0.55
• Beat/Miss: Beat by +$0.05
• One Year Ago EPS: $0.59

Williams Companies Revenue Results

• Actual Revenue: $3.05 billion
• Expected Revenue: $2.90 billion
• Beat/Miss: Beat by +$144.84 million
• YoY Revenue Growth: +10.00%

Williams Companies Announcement Details

• Quarter: Q1 2025
• Date: 5/5/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, May 6, 2025
• Conference Call Time: 9:30AM ET

Williams Companies (NYSE:WMB), together with its subsidiaries, operates as an energy infrastructure company primarily in the United States. It operates through Transmission & Gulf of Mexico, Northeast G&P, West, and Gas & NGL Marketing Services segments. The Transmission & Gulf of Mexico segment comprises natural gas pipelines; Transco, Northwest pipeline, MountainWest, and related natural gas storage facilities; and natural gas gathering and processing, and crude oil production handling and transportation assets in the Gulf Coast region. The Northeast G&P segment engages in the midstream gathering, processing, and fractionation activities in the Marcellus Shale region primarily in Pennsylvania and New York, and the Utica Shale region of eastern Ohio. The West segment consists of gas gathering, processing, and treating operations in the Rocky Mountain region of Colorado and Wyoming, the Barnett Shale region of north-central Texas, the Eagle Ford Shale region of South Texas, the Haynesville Shale region of northwest Louisiana, the Mid-Continent region that includes the Anadarko and Permian basins, and the DJ Basin of Colorado; and operates natural gas liquid (NGL) fractionation and storage facilities in central Kansas near Conway. The Gas & NGL Marketing Services segment provides wholesale marketing, trading, storage, and transportation of natural gas for natural gas utilities, municipalities, power generators, and producers; asset management services; and transports and markets NGLs. The company owns and operates 33,000 miles of pipelines. The Williams Companies, Inc. was founded in 1908 and is headquartered in Tulsa, Oklahoma.

Williams Companies Q1 2025 Earnings Call Transcript

Key Takeaways

• The company delivered a 9% increase in adjusted EBITDA in Q1, raised its full-year EBITDA guidance by $50 million to a $7.7 billion midpoint, secured an S&P upgrade to BBB+, and increased its dividend by 5.3% to $0.50 per share.
• Williams launched its first behind-the-meter data center project, Socrates, committing $1.6 billion for gas infrastructure under a ten-year PPA at a 5× EBITDA build multiple, with two additional projects already ordered and a 10% investment in Cogentrix Energy to optimize future power market offerings.
• Transco’s Power Express project—a 950 MMcf/d brownfield expansion—secured anchor shipping commitments, leverages existing rights-of-way to minimize permitting risk, and joins a pipeline backlog of high-return transmission projects now in service or under development.
• Operational execution remained strong with the Southeast Energy Connector and Texas-Louisiana Energy Pathway placed into service, major expansions in the Southeast, Haynesville and West under construction, and deepwater projects Whale and Ballymore ramping ahead of Shenandoah and Salamanca commissioning.
• Leadership changes were announced with Chad Zamarin named President & CEO effective July 1, Alan Armstrong transitioning to Executive Chairman, and Larry Larson stepping in as COO, ensuring continuity of Williams’ natural gas-focused growth strategy.

Presentation

[Operator]

Good day, everyone, and welcome to the Williams First Quarter twenty twenty five Earnings Conference Call. Today's conference is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Mr. Danilo Giovanni, Vice President of Investor Relations, ESG and Investment Analysis. Please go ahead.

[Danilo Juvane, Vice President, Investor Relations at The Williams Companies]

Thanks, Ari, and good morning, everyone. Thank you for joining us and for your interest in The Williams Companies. Yesterday afternoon, we released our earnings press release and the presentation that our President and CEO, Alan Armstrong, and our Chief Financial Officer, John Porter, will speak to you this morning. Also joining us on the call today are Larry Larson, our Chief Operating Officer Lane Wilson, our General Counsel and Chad Zemmerich, our Executive Vice President of Corporate Strategic Development. In our presentation materials, you'll find a disclaimer related to forward looking statements.

[Danilo Juvane, Vice President, Investor Relations at The Williams Companies]

This disclaimer is important and integral to our remarks, and you should review it. Also included in our presentation materials are non GAAP measures that we reconciled to generally accepted accounting principles. And these reconciliation schedules appear at the back of today's presentation materials. So with that, I'll turn it over to Alan Armstrong.

[Alan Armstrong, President & CEO at The Williams Companies]

Okay. Well, thanks, Danilo, and thank you all for joining us today. We do have a very positive story to share with you on our first quarter performance, which was really driven by the exceptional results within our base business in this quarter. So but before I dive into my remarks, I do want to welcome Larry Larson, our new Chief Operating Officer to the call. This is technically day two for Larry, but he's been a valuable member of the Williams team for more than twenty five years.

[Alan Armstrong, President & CEO at The Williams Companies]

So I know you're going to come to value his perspective and knowledge of our operations just as you have enjoyed that for Michael Dunn, who did retire this past Friday. So Larry has served as an important member of Michael's leadership team over the past several years. So this will be a seamless transition with Larry carrying forward the commitment to excellence that Michael had established in all aspects of our operations. Obviously, some other leadership changes to hit on, but I'll save my remarks on that matter for the end of the call. So beginning here on Slide two, it really is staggering when you step back and consider all the facets of our businesses that are providing high return growth opportunities.

[Alan Armstrong, President & CEO at The Williams Companies]

The positive results in the near term, like the 9% growth this year coupled with an improved credit rating already continue to speak for themselves, but the continued string of very high return projects suggest that we are in the early innings of this long horizon of growth. So let me just share a few of the drivers for my optimism in this level of growth continuing. First, we will be a big beneficiary of the fast rising data center power load. And we are very encouraged by the uptake we are seeing on the new model we have brought to market and the indirect business we are seeing on our gas transmission systems that is showing up as very high return large scale expansions. Socrates is our first example on the direct service front and we talked first about this project during our earnings call in February and since then we have fully contracted this project that will deliver speed to market solutions for the growing data center demand in Ohio.

[Alan Armstrong, President & CEO at The Williams Companies]

Williams will invest approximately $1,600,000,000 to provide committed power generation and associated gas pipeline infrastructure for our customer in this area, and the project is backed by a ten year fixed price power purchase agreement with an opportunity to extend the contract for another five years and beyond. Importantly, we expect the project to generate earnings consistent with a five times EBITDA build multiple, an impressive return given the low risk nature of the power purchase agreement and the fact that this project does not leverage Williams' existing asset footprint to a meaningful degree. We are full steam ahead on this project and anticipate completing the build out in the second half of twenty twenty six. We also have two other projects that are utilizing the same model in flight now and have ordered equipment that has the same backstopping agreements that we used in the original Socrates project. Much more to come on this, but it is clear that we have a model that works for this customer base and the opportunities are developing fast in this space.

[Alan Armstrong, President & CEO at The Williams Companies]

Next on the indirect side, we are pleased to announce Transco's Power Express Pipeline, a nine fifty million cubic feet per day expansion to markets North Of Station 165, helping to serve the power hungry Virginia area. The project is backed by a significant commitment from an anchor shipper and will utilize existing right of ways and infrastructure to dramatically reduce permitting risk and provide scalability. This project will provide the same kind of return as our CECI project and the demand for this capacity has been robust. And finally, we acquired a 10% interest in Cogentrix Energy, closing on this deal in early March. This investment enhances our sequent market intelligence and gives Williams insight into how to better serve the emerging power markets with natural gas supply.

[Alan Armstrong, President & CEO at The Williams Companies]

Importantly, we are excited to be working with the Quantum team on this business and to ensure that the gas supply is optimized for these gas fired power plants. Next, turning to our operational execution. Our team continues to flawlessly deliver on a string of high return projects that will accelerate earnings growth throughout the balance of the year. This quarter, we successfully placed two projects into service, the Southeast Energy Connector in Alabama and the Texas to Louisiana Energy Pathway along the Gulf Coast. These fully contracted Transco expansions were designed to reduce land use and minimize community and environmental impacts, while also delivering clean and affordable natural gas volumes to the region.

[Alan Armstrong, President & CEO at The Williams Companies]

These projects demonstrate both LNG export growth and coal to gas conversion opportunities. Our project execution team continues to deliver on projects throughout this year, Starting construction on another expansion in the Southeast on Transco, the Leg project in Haynesville, and out West on our Overthrust westbound expansion. These projects represent nearly two Bcf a day coming online for the balance of this year. Also, in the deepwater, the deepwater really is coming on strong this year and shows no signs of slowing down. We recently completed two expansions that add significant earnings growth.

[Alan Armstrong, President & CEO at The Williams Companies]

The Whale expansion went into service in the first quarter and has been ramping up through the first quarter. And Chevron's Valley Moor started up two weeks ago. Both of these projects both of these prospects are large scale and will be significant contributors for the balance of the year. Additionally, in the deepwater, both the Shenandoah and Salamanca floaters are now being commissioned and these will drive significant cash flows across our discovery assets, which is now wholly owned. These projects are expected to make meaningful contributions in the third quarter.

[Alan Armstrong, President & CEO at The Williams Companies]

And finally, let me just hit on a few key financial highlights from the quarter before I turn it over to John to walk through the results in detail. First of all, we are raising our adjusted EBITDA guidance midpoint by $50,000,000 to $7,700,000 driven by our strong base business performance and our Cogentrix investment addition. Our CapEx increase of $925,000,000 reflects the update that we provided with the announcement of our Socrates project. And also in recognition of the resilient business model and balance sheet strength, we received an S and P credit rating upgrade to BBB plus during the quarter and very recently were assigned a positive outlook by Moody's. The strength of the base business was really the story in the first quarter with both the transmission and golf hitting new record EBITDA and strong rebounds from the West and Northeast gathering.

[Alan Armstrong, President & CEO at The Williams Companies]

In the Transmission and Gulf, this record was driven by both record contract gas transmission capacity and record gathering, processing, and storage fee based revenue. So the transmission business, we again saw now a record in the long term transmission capacity, but also saw the fee based revenue in gathering in the deepwater and in our storage business pick up. In the West, it was driven by strong gathering volume rebounds and bolt on acquisitions. Given the strong volumes we are currently seeing, we expect to see more records surpassed again in the second quarter. Speaking of the second quarter, this marks the thirty seventh consecutive quarter of meeting or beating consensus, And that is on top of this was the eighth time that we've raised our guidance during the same period.

[Alan Armstrong, President & CEO at The Williams Companies]

So lastly, we increased Williams quarterly dividend in the quarter, up 5.3% to $0.50 per share and demonstrating continued commitment to Williams' long standing and well covered dividend program. And with that, I'm going to turn it over to John.

[John Porter, Senior VP & CFO at The Williams Companies]

All right. Thanks, Alan. Starting here on slide three with a closer look at our adjusted EBITDA performance, which was up 3% over the first quarter of twenty twenty four. Excluding the Marketing business, our adjusted EBITDA was up 5% with growth across all the other segments. Our overall first quarter twenty twenty five results were basically right on top of our business plan.

[John Porter, Senior VP & CFO at The Williams Companies]

Additionally, I will note that our business plan anticipated our first quarter to show the least amount of quarterly growth over 2024 with our forward 2Q through 4Q 'twenty five quarters each showing substantially higher growth rates. In other words, we expect growth over the prior year will accelerate each quarter through the remainder of the year. I'll address our current thoughts on full year performance in a moment. Walking now from last year's $1,934,000,000 to this year's record $1,989,000,000 we start with our transmission and golf business, which improved $23,000,000 or 3%, setting an all time record due primarily to higher revenues from expansion projects. At Transco, we had increases from regional energy access, Southside Reliability Enhancement and partial quarter contributions from Carolina Market Link.

[John Porter, Senior VP & CFO at The Williams Companies]

We also continued to see growth from our storage businesses with renewals at Gulf Coast Storage and Nortex coming in at higher rates as we had expected from those two acquisitions, as well as incremental contributions from our market based rate at our Washington storage facility. In The Gulf, we saw contributions from our Discovery acquisition, as well as initial contributions from our Whale project that were partially offset by some maintenance and producer issues. Even with those issues, we saw about a 12% increase in Gulf gathering volumes and about 42% higher NGL production. Lastly for this segment, I'll just note that although our new Transco rates went into effect on March 1, you're not really seeing much of an impact here as we continue to maintain a conservative reserve pending the final settlement. Next, our Northeast G and P business improved $10,000,000 or 2%, primarily on higher revenues, including the effects of higher gathering and processing rates.

[John Porter, Senior VP & CFO at The Williams Companies]

This segment was unfavorably impacted by the Aux Sable divestiture that we made last August. Overall volumes were basically pretty flat with the first quarter of 'twenty four. However, they are up about 6% sequentially over the fourth quarter of 'twenty four, and we've continued to see overall additional growth in April. In the West, we were $26,000,000 or 8% higher, driven by strong margins, Overland Pass pipeline volumes and a partial quarter from the Rimrock acquisition that closed at the January. We did have a small gain on an asset sale that was under our materiality threshold for adjustment of around $10,000,000 The West was negatively impacted by a step down in our minimum volume commitments at Eagle Ford.

[John Porter, Senior VP & CFO at The Williams Companies]

On the volume front, similar to the Northeast, overall volumes were basically pretty flat with the first quarter of 'twenty four, but up about 5% sequentially over fourth quarter 'twenty four, and we've continued to see overall additional growth in April. Our Sequin Marketing business had another strong start to the year with $155,000,000 of adjusted EBITDA, which is the third straight year where our first quarter marketing results exceeded $150,000,000 However, the '25 results were still down about $34,000,000 overall versus 2024. And this segment did see a small one month three million dollars contribution from the Cochentriqs investment that Alan discussed earlier. And then finally, our upstream business included in our other segment was up about $37,000,000 and roughly half of that was related to our consolidation of the Wamsutter upstream position effective in November of last year. Also, we did see some overall improvement in gas prices year over year.

[John Porter, Senior VP & CFO at The Williams Companies]

So that gets you to the $1,989,000,000 of EBITDA for first quarter 'twenty five or 3% growth, which as I mentioned a moment ago, should be the lowest growth rate we see this year as we look forward to accelerating growth through the remainder of this year. Now let's move to the next slide and discuss what we're seeing in our outlook for the remainder of 'twenty five. As Alan mentioned, we are revising our 2025 adjusted EBITDA guidance upward from a previous midpoint of $7,650,000,000 to now $7,700,000,000 and we're moving the top of the range to $7,900,000,000 At $7,700,000,000 we will see 9% growth in adjusted EBITDA over 'twenty four and a 9% CAGR from 2020. Our current guidance reflects a solid start to 'twenty five, the addition of the Cogentrix investment and our overall confidence in the growth of our underlying business plus line of sight to an extraordinary number of projects coming online in the near future. Speaking specifically to the segments, in our Transmission and Golf segment, we look forward to settling our Transco rate case and seeing the contributions from the two transmission projects we recently placed in service, as well as completing six additional transmission projects by the end of this year, and we remain optimistic about continued upside from the re contracting of our storage business.

[John Porter, Senior VP & CFO at The Williams Companies]

Additionally, in the deepwater, we've now completed the Whale and Ballymore projects and still have the Shenandoah and Salamanca projects to go for 2025. In the deepwater, we are only in the early stages of a volume ramp that will accelerate through the remainder of the year. In our gathering and processing businesses, we continue to see overall strengthening in our volumes, reflecting our exposure to crucial natural gas focused basins and our Haynesville expansions, including our large scale Louisiana Energy Gateway project, is proceeding very well with expected completion in 3Q 'twenty five. In our more commodity exposed upstream and marketing businesses, we've generally lowered our expectations for pricing tailwinds. However, we are still well positioned to deliver on our plan for our upstream business as the combination of our first quarter performance and forward hedge book have basically already locked in about 65% of the expected 2025 revenues.

[John Porter, Senior VP & CFO at The Williams Companies]

And the majority of the Marketing Businesses plan has been realized through the first quarter. As we've demonstrated over the last ten plus years, our business is very resilient to commodity price swings and especially insulated from the risk of crude oil downturns associated with economic downturns. Williams continues to be primarily focused on two things: demand for natural gas pipeline capacity and the growth in natural gas volumetric demand. We continue to have confidence in the outlook for both of these regardless of near term macroeconomic conditions and look forward to delivering at least 9% growth this year. And with that, I'll turn it back over to Alan.

[Alan Armstrong, President & CEO at The Williams Companies]

Okay, great. Thanks, John. And just a few closing remarks before we turn it over to your questions. I'll start by saying it should be very apparent that our business is firing on all cylinders, and we have a track record of generating predictable growing earnings in a variety of economic cycles, which underscores the value of Williams as a weatherproof long term investment with a high growth dividend. With an ever expanding backlog of fully contracted projects extending beyond 02/1930 and our proven ability to capture new business in emerging markets, Williams is positioned better than any other company to benefit from the coming wave of natural gas demand, from the power generation market, industrial reshoring, and LNG exports, while continuing to deliver on traditional market needs.

[Alan Armstrong, President & CEO at The Williams Companies]

Williams is excelling on all fronts, thanks to a strong and energized organization that is very passionate and dedicated to our strategy and to doing the right thing. So I feel that the time is right for the transition we announced yesterday that effective July 1, Chad Zamarin will succeed me as President and CEO, and I will serve as Executive Chairman of the Board. And Steve Bergstrom, who has been a great leader of our Board and a great thought partner to me personally, will become our Lead Independent Director. Since joining Williams, Chad and I have worked together closely and he has successfully built on our strong natural gas focused strategy while advocating for Williams and the role of natural gas in our clean energy future. He is the right next leader for Williams at this point in our company's history, and I know he will take the company forward with pride and commitment to Williams' values.

[Alan Armstrong, President & CEO at The Williams Companies]

And with that, I'll turn the call over to Chad for a few brief remarks before we get to Q and A. Chad?

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

Thanks, Alan. I am truly humbled and honored to be asked to lead Williams in the months and years ahead. The rich history of Williams is truly the story of a great American company and we have many amazing chapters left to right.

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

Alan, you've been a great mentor, leader and thought partner for me and I'm grateful for the trust that you and our Board of Directors have placed in me and in our leadership team to carry Williams vision forward. Rest assured that there are no major sea changes here and no change in how the compass is set for Williams. Alan and I together with the entire leadership team have for years worked closely with our board to craft and continually tune our natural gas focused strategy. And as you've heard today, our strategy continues to deliver with abundant opportunities on the rise. I look forward to continuing to work with the board and with Alan in his role as Executive Chairman to continue to build on our success.

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

Alan, on behalf of every shareholder and on behalf of every current and former employee that has proudly worn the Williams badge, I want to say thank you. It has been one of the greatest privileges of my career to work with you and to witness your unwavering dedication to this great company. I know how much you love Williams, and I know how much that you and Shelley have sacrificed for the company, and know that we will strive every day to match your passion for Williams, and we will always work to make you proud. I hope that you know how much

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

you mean to us,

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

and I'm glad that you will still be close by in your role as Executive Chair. And now, we will open up the call for questions.

[Operator]

Thank you. At this time, we will conduct a question and answer session. Please limit to one question and one follow-up. Our first question comes from the line of Praneeth Satish of Wells Fargo. Your line is now open.

[Praneeth Satish, Analyst at Wells Fargo]

Good morning. First, let me offer my congratulations to both Alan and Chad. And Chad, you have some big shoes to fill. Alan, I think you mentioned during your prepared remarks that Williams has ordered equipment for two more behind the meter power projects, if I heard you correctly. Can you help us just understand if the size and returns for these potential projects are going to be similar to what we see saw with Socrates?

[Praneeth Satish, Analyst at Wells Fargo]

Or do you think that the returns could be even better in the extent to the extent you're able to leverage your own existing infrastructure? And separately, given that you've already ordered the equipment, should we expect FID in the coming months?

[Alan Armstrong, President & CEO at The Williams Companies]

Yes, Preeti, I'm going to have Chad take that one. He's been right in the middle of that. So Chad can take that.

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

Sure. Yes.

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

We do expect these projects to reach full commercialization throughout the remainder of the year. And we also expect these projects to be contracted very similarly to Socrates and have likewise really attractive returns. I think we'll hold to see if they're materially different than

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

the projects we have.

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

But I think generally scope and scale will be similar, maybe a bit smaller as we get more efficient in how we design these solutions. For the most part, we'll look similar to Socrates.

[Praneeth Satish, Analyst at Wells Fargo]

Got it. And then maybe if you can elaborate on the strategic rationale for the Cogentrix investment beyond, I guess, market intelligence, do you anticipate this evolving into a platform for additional power generation investments? What's your appetite for increasing your ownership stake beyond the 10% or just making more investments into IPPs?

[Alan Armstrong, President & CEO at The Williams Companies]

Yeah, Patrice, I'll take that one. I think people should realize that there is a lot of change afoot, particularly in the Northeast, on the power market and the way that business is contracted. It's becoming very evident that the short term power auction markets don't provide for those merchant power plants taking out long term firm capacity. And that's going to have to happen to maintain a reliable grid in those markets. So we are really watching that with a lot of close interest.

[Alan Armstrong, President & CEO at The Williams Companies]

And this is a great way for us to really be in a position to help on the gas supply side of that. So you really shouldn't see it as an investment into the merchant power generation space as a strategy as much as you should see it. We recognize there's a lot of change that's going to happen in terms of the gas supply into that business, particularly in the Northeast. And we want to be front and center on what that's going to look like. And then finally, would just say really excited to be working with the Quantum Energy Group, Great partner in a lot of areas, and we really like working with them.

[Alan Armstrong, President & CEO at The Williams Companies]

And so this is a great opportunity for us to expand that relationship. So it's not quite what people might think it is in terms of us thinking about going into the merchant power business. And I appreciate that coupled along with going into the serving the data centers, people might get that impression. But that's not at all what our strategy is.

[Praneeth Satish, Analyst at Wells Fargo]

Understood. Thank you.

[Operator]

Thank you. Our next question comes from the line of Jeremy Tonet of JPMorgan. Your line is now open.

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

Hi. Good morning.

[Alan Armstrong, President & CEO at The Williams Companies]

Good morning, And,

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

yeah, congratulations both Alan and Chad. Congrats on that. And maybe just moving into, behind the meter as well with the question here. Just wondering, I guess, you know, Williams has provided a solution that I think a number of others in the market have looked to pursue but have not been able to deliver, you know, companies or IPPs or other. I guess, what has enabled Williams to do this versus others?

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

What do you see as your competitive advantage here? How big is this opportunity set for Williams as you see it?

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

Yeah, thanks Jeremy. This is Chad. I mean, first thing I'd say is a huge shout out to the Williams team. We are very focused on collaborating across the organization in driving growth within our core businesses. And frankly, I credit a lot of our success on the Socrates project and Empower Innovation to the team and to that collaboration.

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

And then beyond that, it's just making sure we can put together solutions for customers and bring all of the different capabilities of the organization. We can provide gas supply solutions. We understand pipeline capacity are our own and even third party pipelines through our Sequin Market Intelligence. We obviously build a lot of pipeline and turbine facilities. And so bringing all the different pieces together into a solution that is ready made for a customer, think has been truly a differentiator.

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

And again, credit to the teams for being able to pull all that together. And then I would just mention that, I think John was mentioning earlier, we like this opportunity. We think it will layer in nicely over time. It's not I know there's a lot coming at us really fast. The team is working on making sure that this complements our investment strategy and we've got a nice layering in of projects over time.

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

And so I would think of these next two projects that we're working to commercialize in addition to other projects as layering in over the next few years and through the end of the decade.

[Alan Armstrong, President & CEO at The Williams Companies]

Yeah, and I would just add Jeremy, one of the things that I think we are really good at as a company is developing high trust relationships. And that reputation helps us obviously when we go into situations like this. But importantly, we also work to have that on the supplier side as well. And so us having a long term relationship with Solar in a way that provides us a leg up on being able to get the equipment there is very valuable.

[Alan Armstrong, President & CEO at The Williams Companies]

Those relationships pay off in moments like this instead of just beating down vendors to the very last nickel all the time, but really trying to work with them to improve their product and service in a high trust relationship really pays off dividends in times like these. And so I think you see that coming through as well.

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

Got it. That's helpful there. Thanks. And just kind of shifting towards the gas markets maybe a bit more color versus in addition to what you said before. In thinking about your conversations with producer customers here, there's a lot of focus on oil directed drilling, but there's impacts on the gas market as well.

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

I'm just wondering if you could comment a bit more how you see the gas market unfolding here given these dynamics and what it means for your systems if the call on gas continues in this less associate gas or otherwise? Just how you see this playing out and what are the impacts for Williams?

[Alan Armstrong, President & CEO at The Williams Companies]

Yeah, we certainly are seeing that call on gas right now and a lot response in the dry gas basins for sure. And obviously, if oil continues to soften, we'll continue to see rigs rotate into the gas areas, I think. It's going to be a little choppy because we're going to see big increases on the demand side and we're going to see supply responses that are not always directly in line with the market demand. So I think it's going to be kind of choppy on the way up, if you will, on the demand side, but we certainly are seeing responses on our system. Saw that growth during the first quarter and certainly seeing that growth on our systems here in April and in the second quarter.

[Alan Armstrong, President & CEO at The Williams Companies]

So we are extremely well positioned for that call and we're certainly seeing it come through our systems right now. So that's been a strategic decision for a long time to really focus on the gas directed basins because we think that they'll have to be called on in a growing gas demand. And I would just say that's come a little stronger than we even expected So very well positioned on that take and we certainly are seeing a big call on gas supply in those cases.

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

Got it. Thank you for that.

[Operator]

Thank you. Our next question comes from the line of Spiro Dounis of Citi. Your line is now open.

[Spiro Dounis, Analyst at Citigroup]

Thanks, operator. Morning, team, and congrats, Alan, Chad and Larry. Maybe just to start with the project backlog as it relates to capital spending. It sounds like a lot of healthy backlog materializing here, and we've already sort of seen that impact on 2025. But just given sort of constantly sort of percolating list of items coming in, curious how you're thinking about elevated CapEx going forward?

[Spiro Dounis, Analyst at Citigroup]

Is this going to be a feature over the next few years given all these projects starting to manifest themselves? And are there any self imposed limits in any given year on how much you want to spend?

[John Porter, Senior VP & CFO at The Williams Companies]

Yeah, thanks for the question, Spiro. I mean, think as we have discussed in the past in our long range forecasting exercise we do every year, we've just continuously seen this twenty twenty five-twenty twenty six timeframe as being a period of time where the company was going to have really more and more balance sheet capacity. Again, reminding folks that our targeted leverage range is 3.5 to four times. And even with this first Socrates project, our guidance this year is for 3.65 times, still very comfortably within that range. And as we've talked about before, as we look forward into the future, we saw sort of an ever increasing capacity coming on the balance sheet, even with, I think, what are ultimately probably going to be pretty conservative cash tax assumptions going forward.

[John Porter, Senior VP & CFO at The Williams Companies]

We still saw that sort of ever increasing level of balance sheet capacity. And so going back over a year ago or so, lot of the focus has been what's going to come along to make a really good use of that balance And so what we've seen,

[John Porter, Senior VP & CFO at The Williams Companies]

I think, over the last

[John Porter, Senior VP & CFO at The Williams Companies]

twelve months is our commercial teams are very busy, and maybe as busy as I've ever seen them. And then, course, we've had the power innovation stuff come along as well. And so really, it's very exciting. We're seeing a time frame where we have enormous opportunities in business coming along at a time when we have really strong balance sheet capacity. And I think what's really exciting is the stuff that's coming in has a very strong return profile, great credit, long term terms.

[John Porter, Senior VP & CFO at The Williams Companies]

And so we really like the capital that's coming at us organically. And I think we have more than enough capacity to fund what's in front of us. And we've stress tested that. And of course, we'll be very disciplined on the returns and the credits and looking for the long term contracts that we think we've got plenty of capacity and very excited about the projects we're seeing coming from our commercial teams.

[Alan Armstrong, President & CEO at The Williams Companies]

Yeah, I would just add to that that it's very different. The short cycle that we're seeing for these for the power innovation projects are such a quicker turn on the capital. Five times EBITDA multiple on a project that takes eighteen months to have online is very different than one that takes thirty six months to have online. So really strong returns from these projects that will continue to expand the balance sheet and our capacity, as John said. So I would say a great problem to have, but so far we feel like we have plenty of capacity of taking on what's out there.

[Alan Armstrong, President & CEO at The Williams Companies]

And very glad that we've held our return threshold so high against our projects because it is giving us that kind of capacity that we wouldn't otherwise have if we've been investing at lower return projects.

[Spiro Dounis, Analyst at Citigroup]

Got it, helpful. Thanks, John and Alan. Second question, maybe just to quickly go back to the leadership change. You both addressed this to some degree in your remarks, but maybe just to put a finer point on it. Alan, long successful tenor at Williams, curious why now is the right time.

[Spiro Dounis, Analyst at Citigroup]

And Chad, it sounds like not a lot will change going forward, but just curious what you think your mandate is going forward.

[Alan Armstrong, President & CEO at The Williams Companies]

Yes, Thura. Thanks for the question. Well, I would just say, it's such a great time. We have I think our culture as a company is in great shape. The business is really running well right now.

[Alan Armstrong, President & CEO at The Williams Companies]

Very excited about the talent in both Chad and the team that's coming up in the organization. So I think the mix is just right. And I think it's a great time to bring Chad's energy and passion to bear across all these opportunities. So this is not necessarily anything other than just a very objective viewpoint from a shareholder perspective about what I think is the right time for making the change. And so I couldn't be more excited about this as a personal shareholder myself.

[Alan Armstrong, President & CEO at The Williams Companies]

And so I do think it's the right time and we just got a great future and a lot of passion and energy in Chad and I think he's going to do a fantastic job of taking the organization to the next level.

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

Yeah. And Alan, as far as mandates go, I still remember eight years ago when I joined the company, one of the first things Alan asked me to do is to facilitate our strategy process. And we've built a process where we work very collaboratively as a team across the organization and with our board of directors. And when you ask about a mandate, I would expect more of the same.

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

This has been a strategy that we've been very committed to. We will continue to stay committed to stable, predictable growth, protecting the balance sheet. We do explore adjacent opportunities, but with the clear eyed focus on driving growth in business back to our core business. Alan mentioned that Cogentrix is a great example. We're not taking a large turn into a different strategic area.

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

We're to take a very small position that will allow us to be better positioned to drive business back to our core business because that's a strong fundamental tailwind that we see in the natural gas value chain. So I would expect that you would continue to see more of the same. This team has been very ingrained in our strategy process. And the great news is Alan isn't going far. He's going to be our Executive Chair and will continue to work through that same strategy process that we have been now for great years.

[Spiro Dounis, Analyst at Citigroup]

Great. I'll leave it there. Alan, don't be a stranger.

[Alan Armstrong, President & CEO at The Williams Companies]

Okay. Thanks very much.

[Operator]

Thank you. Our next question comes from the line of Theresa Chen of Barclays. Your line is now open.

[Theresa Chen, Senior Analyst at Barclays]

Morning. I'd like to also offer my congratulations to Alan for your announcement and congratulations as well to Chad and Larry and your new roles. First, following the FID of Transco's Power express, I'd like to know what is the capacity at this point across Transco for additional efficient high returning projects using existing right of ways to mitigate potential permitting delays. How much more capacity is there to bring on projects like Power Express? And what are the next areas of growth and development on Transco?

[Alan Armstrong, President & CEO at The Williams Companies]

Gary, you want to take that?

[Larry Larsen, EVP & COO at The Williams Companies]

Yeah, I'll take that one. Yeah, great question. Obviously, we're excited to be able to deliver another great project by PowerXpress, which is really building along our footprint across Transco with easy brownfield expansions that provide us opportunity to kind of streamline through the permitting process. I think as the dynamics and the demand continue to grow across footprint on Transco, we're finding new opportunities left and right. As we're seeing the growth right now in Virginia that's driving Power Express, we're seeing continued growth throughout the Southeast markets, as well as along The Gulf as we see rapid growth in the LNG space.

[Larry Larsen, EVP & COO at The Williams Companies]

And so those dynamics change quite a bit, especially as we see new supply coming into different parts of the system. And so I think we'll continue to find these opportunities to meet our customers' needs. And I think it's going to be dependent upon where the demand materializes and the supply that we start targeting to bring into the system.

[Theresa Chen, Senior Analyst at Barclays]

And on the deepwater side of things, with contribution visibly stepping up in the second half, What are you assuming at this point for annual contribution for this group of projects within guidance relative to the $300,000,000 exit?

[Alan Armstrong, President & CEO at The Williams Companies]

John, I'm not sure

[John Porter, Senior VP & CFO at The Williams Companies]

Yeah, I don't think we really have a deepwater guidance number. But I would say there's been

[John Porter, Senior VP & CFO at The Williams Companies]

some timing shifts on some of

[John Porter, Senior VP & CFO at The Williams Companies]

these projects over the last few years since we have first talked about the overall contribution of these projects in that $300,000,000 number. But ultimately, by the time you get to 2026, you should be more at

[John Porter, Senior VP & CFO at The Williams Companies]

a run rate level relative to this group of projects.

[Alan Armstrong, President & CEO at The Williams Companies]

Yeah. So just to be clear on that, the 300 as an addition to these projects is looks like we'll probably hit that stride towards the end of this year at a run rate level. And so that remains. I would say that some of these are looking even better. I know Chevron is really excited about Ballymore and how those wells are doing right now.

[Alan Armstrong, President & CEO at The Williams Companies]

And so I'm really encouraged to see that. Is doing really well even though it had a very slow start at the beginning of the year, but right now it is really getting on stride. So we may be on the higher end of that by the end of the year. But obviously, there's a few things left to happen on Salamanca and Shenandoah that are hard to predict at this point. But But so far looking really good and very encouraged to hear Chevron's comments on what their cost structure is looking like around developing more and more reserves around the infrastructure, existing infrastructure because obviously that will just continue to feed our downstream pipeline.

[Alan Armstrong, President & CEO at The Williams Companies]

So great times in the deepwater both in the current, but I think looking forward, the producers have really learned to take the cost down out there and that's all that's going to benefit us directly out there.

[Theresa Chen, Senior Analyst at Barclays]

That's helpful. Thank you.

[Operator]

Thank you. Our next question comes from the line of Gabriel Moreen of Mizuho. Your line is now open.

[Gabriel Moreen, Managing Director at Mizuho Financial Group, Inc.]

Hey, good morning everyone and my congratulations to Alan and Chad as well. May I want to start out sort of at a different angle on the Socrates and data center projects. Can you talk about risk management overall for these projects given long term fixed price contracts on the power side? To what extent you're comfortable with locking in gas and gas costs, I guess, for that long? What happens in the event of force majeure?

[Gabriel Moreen, Managing Director at Mizuho Financial Group, Inc.]

And also to what extent CEQUENT may or may not be involved in helping you manage all this risk?

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

Yeah, thanks, Gabriel. Good questions. First of all, what I'd say is when we talk about a fixed price purchase agreement, it's a fixed price effectively return on our capital and a pass through for the gas that we'll be sourcing the customer. So we are not exposed to commodity price and Sequent will be helping to source and deliver gas on behalf of our customer. But we aren't taking commodity price exposure.

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

On things like force majeure, I would just say that Alan said it, we are and the team is building a very high trust relationship with these counterparties. I mean, this is some of the best credit out there from a customer opportunity perspective. And the customer has been with us in lockstep, making sure that we can go out and invest in these projects in a bit of a new arena, albeit playing to our core strengths and capabilities and things we've done before. But we have very high degree of protection from a contracting perspective. And so I think the team's done a great job of mitigating the risk and capturing very attractive returns.

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

And so I don't see any of the risk issues that are problematic for us. In fact, would say we've mitigated risk on these projects beyond what we could even see on some of our core transmission projects.

[Gabriel Moreen, Managing Director at Mizuho Financial Group, Inc.]

Thanks, Chad. And then maybe if I can ask a question kind of on gas storage, just broadly what you're seeing right now, where some of the maybe potential expansions in your backlog may lie. Just to give an update there.

[Alan Armstrong, President & CEO at The Williams Companies]

Yes. We've certainly announced our Pine Prairie expansion and that we've seen significant interest in the market on Pine Prairie. And that Gulf Coast area, we see this new wave of LNG and potentially even additional LNG FIDs that may not have been in a lot of forecast models, we're going to continue to see. And we're seeing a lot of interest and frankly need for Gulf Coast storage. And so, Pine Prairie is underway.

[Alan Armstrong, President & CEO at The Williams Companies]

That's a 10 Bcf storage expansion. But we expect to continue to see very strong recontracting across the board on our Gulf Coast storage assets. And we'll don't want to get too far ahead of making sure we lock down Pine Prairie, but I would expect additional expansions that we'll be working on, in particular along the Gulf Coast.

[Gabriel Moreen, Managing Director at Mizuho Financial Group, Inc.]

Thanks, Alan.

[Operator]

Thank you. Our next question comes from the line of Jean Ann Salisbury of BofA. Your line is now open.

[Jean Ann Salisbury, Managing Director at Bank of America]

Hi, congrats to everyone and good morning. Can you share a little more color on what the Transco Power Express project does? Is it taking that nine fifty MMcfd on Transco north from Station 165 up to Northern Virginia? And I guess does it rely on Mountain Valley Pipeline expansion going forward in order to proceed?

[Larry Larsen, EVP & COO at The Williams Companies]

Yeah, I can take this. Is Larry. Great question. It is a nine fifty day expansion, primarily sourcing from Station 165 going north. It is not dependent upon a Mountain Valley expansion Mountain Valley pipeline expansion at this point.

[Larry Larsen, EVP & COO at The Williams Companies]

And it's really scalable, as Alan had mentioned earlier. I think that's the great thing about the ability to be able to move volumes through the Transco system. And so right now, it's primarily charged to be that more flow capacity.

[Jean Ann Salisbury, Managing Director at Bank of America]

Great. That's very clear. Thank you. And then as a follow-up, can you just update us on if you are pursuing constitution? I think that relatedly there's an open season on Millennium Pipeline that looks much like constitution.

[Jean Ann Salisbury, Managing Director at Bank of America]

So if that goes forward, would it replace the need for constitution? Thank you.

[Alan Armstrong, President & CEO at The Williams Companies]

Yeah, would just say the constitution really has the direct connection into those supplies or that project would. So that needs to happen one way or the other. Certainly an opportunity, I think, for pipelines to work together out there to piece together solutions to serve those markets. So we'll see. We certainly are working that project.

[Alan Armstrong, President & CEO at The Williams Companies]

Lots to overcome there. And as you point out really, it does require a combination of pipeline solutions to get all the way into the end markets up there. We may see that, but certainly working that also working NESE and excited about NESE and NESE is a lot easier to pull the trigger on frankly, just a lot less complex and highly dependent on the state of New York and the governor there deciding that they need low cost, low emission energy into those markets. So we'll see what happens on that.

[Jean Ann Salisbury, Managing Director at Bank of America]

Great. Thanks a lot and congrats again.

[Alan Armstrong, President & CEO at The Williams Companies]

I don't think that's too much to mention yet on constitution, we're continuing to work on.

[Jean Ann Salisbury, Managing Director at Bank of America]

Great. Thank you so much.

[Operator]

Thank you. Our next question comes from the line of John McKay of Goldman Sachs. Your line is now open.

[John Mackay, Analyst at Goldman Sachs]

Hey, good morning. Thanks for the time and congrats to everyone as well. I wanted to start on permitting reform. We've seen some Army Corps announcements on kind of fast tracking there under the, I guess, National Emergency Authorization. Just curious what your view is on momentum in Washington, whether we could think about some of the project timelines improving from here.

[John Mackay, Analyst at Goldman Sachs]

Thanks.

[Alan Armstrong, President & CEO at The Williams Companies]

Yeah, I would just say we're encouraged. We know both the administration is working hard to clear any barriers that exist. The FERC as well has been really working hard, and I think the FERC is really a critical component for us. But they continue to work hard to clear the deck of whatever obstacles they can control. But none of that really changes the fact of the permitting process being very exposed to litigation and to obstructive environmentalists throwing wrenches in projects and filing suits that tie the projects up.

[Alan Armstrong, President & CEO at The Williams Companies]

So that's the piece that's the judicial reform in the legislative process needs to be fixed and we're certainly going to work on that. So we're encouraged. It's nice to see some people that actually think their job is to help get infrastructure built as opposed to obstruct it. And so we're encouraged by that. But it is going to take ultimately some legislative reform to be more permanent.

[Alan Armstrong, President & CEO at The Williams Companies]

Lane, do

[Alan Armstrong, President & CEO at The Williams Companies]

you have anything to add to that?

[T. Lane Wilson, SVP & General Counsel at The Williams Companies]

No, I agree. I think there's good momentum in DC to get that reform, but it's ultimately going to be required.

[John Mackay, Analyst at Goldman Sachs]

I appreciate that. Thank you. And maybe just going to the power projects. Should we think of Socrates and kind of whatever is coming next? Are your customers thinking about that as a effectively permanent power solution?

[John Mackay, Analyst at Goldman Sachs]

Or is this kind of a Phase one with some of these smaller turbines and then eventually you'd look to stand up something a little larger and maybe more permanent?

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

Yeah. I think, John, this is Chad. For these projects in particular, generally, the customer is viewing them as a permanent solution. We will have the ability to, if it makes sense for us and for the customer to make a great connection and to optimize the use of the equipment, we will have that capability. But I do think it's important to note, we've talked about just as an example on the first project, we do have a ten year contract with an option for extension, but, you know, the customer has partnered with us on fifteen years pipeline capacity to serve, this facility.

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

And so, we view these as making sure that we can provide grid level of reliability, but with certainty and control for the customer to get online quickly and continue to operate these facilities for the long term.

[Alan Armstrong, President & CEO at The Williams Companies]

Yeah, one of the things I think is missed in this whole discussion on this topic is that one of the things that kind of attracted us to these solutions in the first place is we were seeing how much money was being invested in diesel fired backup generation for the full capacity of the facilities. That's an enormous expense on the one hand and it's also a tremendous amount of emissions even if it's only running a couple of days. And so we do see this ultimately as a great that acknowledging how much money was being invested on standby puts these facilities at the worst case condition on this would be this being purchased at its original construction cost and standby generation. So we think this is a very elegant solution versus all the money that's been spent on diesel power generation is to have gas fired back up ultimately at these facilities.

[Alan Armstrong, President & CEO at The Williams Companies]

So that would kind of be a worst case scenario. Our returns don't depend on that actually, to be clear, but that would be a huge homerun if that was the outcome.

[John Mackay, Analyst at Goldman Sachs]

That makes sense. Thanks, Alan. Thanks, Chad.

[Operator]

Thank you. Our next question comes from the line of Manav Gupta of UBS. Your line is now open.

[John Porter, Senior VP & CFO at The Williams Companies]

Mana.

[Operator]

Mana.

[Manav Gupta, Executive Director at UBS Group]

Monarch, you hear me now?

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

Yeah.

[Alan Armstrong, President & CEO at The Williams Companies]

Yeah. I can hear you.

[Manav Gupta, Executive Director at UBS Group]

So sorry about that. My question is on the Haynesville side. You obviously have two attractive projects coming on later in the year. But as you see this LNG growth happening on the Gulf Coast, what will be the demand pull on the Haynesville Basin? And how can Williams benefit from all these projects?

[Larry Larsen, EVP & COO at The Williams Companies]

Yeah, this is Larry.

[Larry Larsen, EVP & COO at The Williams Companies]

I'll take that question. Yeah, obviously, we've got the leg project that's coming online here in third quarter this year that's going to create a lot of additional delivery capacity out of the Haynesville. And as we continue to see more and more projects get sanctioned as well as come online over the next few years, we do expect it to be a pretty significant demand pull on the Haynesville supply. And we're working very closely with our customers on potential other projects that could materialize, I think, over the next couple of years. I think right now they're kind of growing back and building up the supply into existing capacity as we saw the pullback from last year.

[Larry Larsen, EVP & COO at The Williams Companies]

But I think if you look at that outlook over the next several years, we're seeing tremendous pull on the Haynesville, several BCF over the next few years just to be able to meet the growing LNG demand. So we anticipate there'll be more projects to come.

[Manav Gupta, Executive Director at UBS Group]

Perfect. My quick follow-up is, you have a long term guidance of 5% to 7% EBITDA growth, but the project lineup is looking very attractive. So I'm just trying to understand for 2026 and 2027, what could push this more towards like 7% versus 5% or even higher for 'twenty six and 'twenty seven? What could drive you towards the top end of that guide? Thank you.

[Alan Armstrong, President & CEO at The Williams Companies]

Yeah. I would just say we've had that 5% to 7% quite some time, and we have been outperforming on that. And the amount of high return projects that are coming at us right now would certainly drive us towards the higher end of that. And so one of the challenges has been in the coming year as we continue to beat our prior year estimates, the percentage raise gets to be tougher and tougher. But I would say right now, given the projects that we have coming at us, I do think that we certainly have the ability to be towards the higher end of that, even acknowledging the law of big numbers.

[Alan Armstrong, President & CEO at The Williams Companies]

And so it is a pretty exciting time to think that you can continue this pace at the scale that we're operating at.

[Manav Gupta, Executive Director at UBS Group]

Thank you for the response, I'm sorry about the earlier voice issues.

[Alan Armstrong, President & CEO at The Williams Companies]

No problem. Thanks.

[Operator]

Thank you. Our next question comes from the line of Zach Van Everend of TPH and Co. Your line is now open.

[Zack Van Everen, Director - Equity Research at TPH&Co]

Hi, all. Thanks for taking

[Zack Van Everen, Director - Equity Research at TPH&Co]

my questions and congrats to the team. Maybe just sticking on the power projects.

[Zack Van Everen, Director - Equity Research at TPH&Co]

Could you

[Zack Van Everen, Director - Equity Research at TPH&Co]

remind us or give a little bit more details on the gas demand for Socrates? How much you expect that project to pull in, whether it's sequent delivering it or just off of your pipelines?

[Alan Armstrong, President & CEO at The Williams Companies]

Yeah. It's a fairly modest amount of gas. It's under 100,000,000 cubic feet a day for Socrates. And we will be sourcing gas off of two different pipelines in, you know, Ohio. We'll be building pipeline interconnections and laterals to connect the Socrates sites.

[Alan Armstrong, President & CEO at The Williams Companies]

There are two sites that connect to those pipeline supplies. And, yes, Sequent will be providing the services on behalf of the customer to make sure that we can buy that gas and deliver that gas to the customer.

[Zack Van Everen, Director - Equity Research at TPH&Co]

Gotcha. That makes sense. And then maybe one on Cogentrix. Should we think of these earnings as more of marketing style earnings, higher in the winter? Or are there some fixed contracts on the gas side that will have a base earnings for this business?

[Alan Armstrong, President & CEO at The Williams Companies]

Yes, I'd say more to come as we spend more time with the Cogentry's team. But for the most part, we do see these earnings as fairly stable. They're going to be reported in our Sequin marketing business, but we would expect that the run rate earnings to be fairly stable based on what we've seen from historic performance. But also, we like the fundamentals and the setup over time as we think we'll continue to see increasing capacity pricing and spark spreads. But again, the focus for us is on a stable, fairly predictable addition to the Sequent business, but a vehicle that's really going to position us to understand those markets and we think drive additional core business based on that engagement.

[Zack Van Everen, Director - Equity Research at TPH&Co]

Got it, that makes sense. Well, thanks for your time.

[Operator]

Thank you. Our next question comes from the line of Keith Stanley of Wolfe Research. Your line is now open.

[Keith Stanley, Director at Wolfe Research, LLC]

Hi, good morning. Thank you. I wanted to ask on the pace of potential data center projects from here. So the website says you could provide a gigawatt of power solutions to data centers by 2027, which would be quite fast. Curious if that's tied to supply chain constraints or any other inputs.

[Keith Stanley, Director at Wolfe Research, LLC]

And then it seemed on the call you were kind of implying more spacing of these projects with the next two through the end of the decade. So just a sense of what's realistic as far as timing and stringing together more of these projects.

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

Yeah, thanks. This is Chad again. First, I'd say there is certainly going to be some tempering of pace based on supply chain. But we've done a really good job. Team's done a great job of getting out and securing slots within the vendor community to make sure that we can deliver projects.

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

Putting exact numbers on is tough, but in that gigawatt range by the end of twenty twenty six, I think is reasonable. I think layering that sorry, by 2027 is certainly reasonable. I think layering in that kind of scale is absolutely doable. I will say we're also working with companies that have purchased or have space from a turbine and power generation perspective. We are on these first projects doing the entire project ourselves.

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

But our goal is to bring whatever capabilities we can to put solutions together for customers. And so I do think we've got the ability to work with others that may have equipment deliveries and find projects to put to work. But again, our goal is to layer this in a way that complements the balance sheet capacity that doesn't stress the credit metrics. And we'll layer in projects and a year over year, I think likely through the end of the decade.

[Keith Stanley, Director at Wolfe Research, LLC]

And sorry to clarify on that, the one gigawatt by the end of twenty twenty seven is to have those projects online by the end of twenty seven or to FID them by the end of twenty seven?

[Chad Zamarin, Executive Vice President of Corporate Strategic Development at The Williams Companies]

No, those would be online.

[Keith Stanley, Director at Wolfe Research, LLC]

Okay, great. Thanks for that. Second question I wanted to ask on Northwest Pipeline. There's a proposed larger project out there to add looping and compression and bring gas from Wyoming to the Pacific Northwest. Can you talk to the potential size of that investment for that project, timing, and how likely it is to move forward?

[Alan Armstrong, President & CEO at The Williams Companies]

Well, I would just say, if you're seeing it in our material, obviously there's pretty good likelihood it'll be moving forward because it has come through pretty rigorous best to get to that point. But there is a number of parties to contract with on that project and effectively some of those projects are effectively providing power generation in Idaho. A lot of those providing power generation in Idaho for the benefit of Oregon and Washington because they don't want to put emissions in their own state. So that's just providing an opportunity for Idaho and for some of the power generation there. So we'll see how that goes.

[Alan Armstrong, President & CEO at The Williams Companies]

I will say we're very surprised over the last four or five months how many new projects have started to emerge out West as they realize how much they need power in those markets as well. So both on Mountain West and the Salt Lake area and then up through Idaho and even along the coastline. So more to come on that, but I would say that's probably been one of my bigger surprises over the last six months in terms of all the facets of growth we have is how much that's picking up in that area. And people are starting to realize that they are going to need reliable power generation in those markets. So I think one thing though that is something to keep your eye on is lot of big coal plants in those markets.

[Alan Armstrong, President & CEO at The Williams Companies]

And with the effort to maintain coal plants, which I think given the power demand issues we have is not a terrible idea, that we may see of that coal remain online out there. So that's to be determined, but that is a potential shift in those markets out there. But the Salt Lake area and the Idaho area are getting pretty hot in terms of power demands for data centers in those markets, and we absolutely are going to be a part of providing those solutions.

[Keith Stanley, Director at Wolfe Research, LLC]

Thank you.

[Operator]

Thank you. That concludes the Q and A portion of our call. I will now turn it over to President and CEO Alan Armstrong for closing remarks.

[Alan Armstrong, President & CEO at The Williams Companies]

Okay, great. Well, thanks everyone. Certainly appreciate your time today. I'm just going to wrap up by saying that I have seen firsthand what this company can accomplish, and I'm confident our best chapters are still ahead of us as demand for natural gas continues to accelerate and the value of our critical energy infrastructure is realized. You should be confident, as I certainly am, that the company is in the hands of trusted and capable leaders who have a passion for Williams and its vision to be the very best energy infrastructure company in The U.

[Alan Armstrong, President & CEO at The Williams Companies]

S. And so with that, I just want to say a final thank you to investors and the analysts that have followed us for so many years and appreciate your confidence in the company. Thank you.

[Operator]

Thank you for your participation in today's conference. This concludes the program. You may now disconnect.

Participants

Executives

• Danilo Juvane, Vice President, Investor Relations
• Alan Armstrong, President & CEO
• John Porter, Senior VP & CFO
• Chad Zamarin, Executive Vice President of Corporate Strategic Development
• T. Lane Wilson, SVP & General Counsel

Analysts

• Praneeth Satish, Analyst at Wells Fargo
• Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan
• Spiro Dounis, Analyst at Citigroup
• Theresa Chen, Senior Analyst at Barclays
• Larry Larsen, EVP & COO at The Williams Companies
• Gabriel Moreen, Managing Director at Mizuho Financial Group, Inc.
• Jean Ann Salisbury, Managing Director at Bank of America
• John Mackay, Analyst at Goldman Sachs
• Manav Gupta, Executive Director at UBS Group
• Zack Van Everen, Director - Equity Research at TPH&Co
• Keith Stanley, Director at Wolfe Research, LLC