The Williams Companies, Inc. (WMB, Financial) has entered into a significant agreement with a large, investment-grade customer to provide onsite natural gas and power generation infrastructure. This strategic move involves an investment of approximately $1.6 billion, aimed at delivering committed power generation and associated gas pipeline infrastructure. The project is expected to be completed in the second half of 2026, contingent upon the timely receipt of necessary permits.
This initiative marks The Williams Companies' first power innovation project, designed to offer rapid solutions to meet the increasing demand in grid-constrained markets. The project is supported by a 10-year, primarily fixed-price power purchase agreement, with an option for the customer to extend the contract. The company's build multiple for this project is approximately 5x EBITDA, indicating a strong potential for return on investment.
As a result of this agreement, The Williams Companies is increasing its 2025 growth capital expenditure by $925 million, bringing the new total to between $2.575 billion and $2.875 billion. This adjustment is expected to raise the company's leverage ratio midpoint for 2025 to 3.65x, reflecting the company's commitment to strategic growth and infrastructure development.
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