Williams to sue Energy Transfer over gasline fight

Spanish Market: Natural gas
03/12/24

US natural gas pipeline company Williams plans to bring a "very large lawsuit" against its US midstream rival Energy Transfer after a legal dispute between the companies delayed construction of a project by Williams, Williams chief executive Alan Armstrong told Argus in an interview today.

Armstrong said Energy Transfer is the only company in "pipeline history" to have defied industry norms over pipeline crossings in a bid to block competitors' projects . The market "was always very honorable" before that, he said.

Armstrong said he hopes the lawsuit Williams intends to bring against Energy Transfer will undercut the "very bad precedent" set by Energy Transfer's alleged legal strategy and "stop the industry from spiraling into that kind of behavior."

Energy Transfer did not immediately respond to a request for comment.

Energy Transfer throughout 2023-24 tried to block Williams and other rival pipeline companies from building new gas pipelines across its own Tiger pipeline in northern Louisiana, located in the Haynesville shale near a cluster of planned LNG export terminals on the US Gulf coast. Energy Transfer argued that Williams and other pipeline companies' projects proposed an excessive number of crossings under and over its own pipelines, while its opponents argued it was merely interested in controlling market share.

Beyond trying to block Williams from crossing the Tiger pipeline, Energy Transfer also prevailed upon federal regulators to review Williams' proposed 1.8 Bcf/d (51mn m³/d) Louisiana Energy Gateway (LEG) pipeline as an interstate transmission line, rather than a gathering line, as Williams claimed. This would have subjected LEG to more regulatory oversight. But the US Federal Energy Regulatory Commission in September denied the request.

The broad legal strategy by Energy Transfer provoked ire from industry groups and now-Louisiana governor Jeff Landry (R), who warned it could threaten production growth out of the Haynesville and the coming US LNG export boom. Energy Transfer lost case after case to Williams in lawsuits spanning parishes across Louisiana, but the litigation pushed back the in-service date of LEG from late 2024 to the second half of 2025.

The Tiger-LEG pipeline dispute was not the first time Williams and Energy Transfer had seen each other in court. After agreeing to merge in 2015, Energy Transfer in 2016 terminated the merger because of a tax issue that arose before closing. This led a Delaware judge in 2021 to make Energy Transfer pay Williams a $410mn breakup fee for deciding to pull out of its proposed $33bn merger.

By Julian Hast

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03/12/24

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Industry wary of Trump tariffs on Canada, Mexico

03/12/24

Industry wary of Trump tariffs on Canada, Mexico

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Brazil's Vale digs into wholesale gas market

02/12/24

Brazil's Vale digs into wholesale gas market

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28/11/24

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28/11/24

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