EnCap exits Momentum Midstream in $5.5bn sale to Williams

Private equity-backed Momentum Midstream is changing hands after Williams Companies agreed to acquire the business from EnCap Flatrock Midstream in a transaction valued at up to $5.5bn, delivering another significant infrastructure exit for the energy-focused PE firm, according to a report by Bloomberg.

Under the terms of the agreement, Williams will fund the acquisition through approximately $3.5bn in cash and assumed debt, alongside around $2bn in shares.

The deal represents one of the largest acquisitions undertaken by Williams and further strengthens its footprint in the Haynesville shale basin, a key source of natural gas feeding the rapidly expanding US liquefied natural gas (LNG) export market.

Houston-based Momentum Midstream owns and operates approximately 4,000 miles of natural gas pipelines with capacity to transport around 6 billion cubic feet of gas per day. Its network connects production in East Texas and northern Louisiana to LNG export facilities, power generators and industrial customers along the US Gulf Coast.

The acquisition reflects continued demand for established midstream infrastructure as developers seek to expand capacity serving a growing pipeline of LNG export terminals. With regulatory hurdles and lengthy permitting timelines making new pipeline construction increasingly difficult, strategic acquisitions have become an attractive route for operators looking to expand existing networks.

Alongside the acquisition announcement, Williams unveiled plans to invest a further $1.5bn in expanding its infrastructure, including the Delta Access project on its Transco pipeline system and the Shelby Trough Connector, an extension of its Louisiana Energy Gateway network.

The acquisition will increase Williams’ ability to transport natural gas from the Haynesville basin to Gulf Coast export facilities. The company already owns more than 30,000 miles of pipeline infrastructure across the US.

The transaction comes as the US LNG sector continues its rapid expansion, with export capacity expected to increase significantly over the remainder of the decade as new terminals in Texas and Louisiana come online.

BofA Securities acted as lead financial adviser to Williams, with Davis Polk & Wardwell serving as legal counsel. Momentum Midstream was advised by Barclays and Jefferies, while Kirkland & Ellis acted as its legal adviser. Willkie Farr & Gallagher advised EnCap Flatrock Midstream on the transaction.