Williams (WMB) Q3 2026 Earnings Call: EBITDA Reaches $2.04 Billion

Key Takeaways

• Williams reported record third-quarter adjusted EBITDA of $2.04 billion, up 6% from $1.92 billion a year earlier. Adjusted EPS and AFFO both increased 10%.
• Adjusted EBITDA rose 9% during the first nine months of 2026. Management expects the existing business to finish in the upper half of its $8.3 billion-$8.5 billion full-year range.
• Williams closed the Momentum Midstream acquisition on September 3, one month ahead of schedule. Management said integration is progressing as planned, with some synergies emerging earlier than modeled.
• Four pipeline expansions entered service, adding more than 400 MMcf/d of fully contracted, take-or-pay capacity. The final phase of Socrates was also scheduled to begin service after the call, ahead of schedule and within budget.
• Management expects to announce one or two additional power projects by year-end, subject to signed commercial agreements, site control, permitting readiness and other project-risk reductions.
• Williams continues to target adjusted EBITDA growth of at least 11% annually through 2030, supported by pipeline, power and storage projects. Management said its backlog now extends into the 2030s.

Core Financial Data

Transmission, Power and Gulf led quarterly growth. The increase reflected initial Socrates contributions, expanding natural gas storage operations and pipeline projects.

Northeast G&P benefited from higher volumes across liquids-rich and dry-gas systems. West results included initial Momentum contributions, a full quarter from the Louisiana Energy Gateway Pipeline and other Haynesville volume growth.

The Other segment declined primarily because Williams divested its upstream Haynesville assets in January 2026. Sequent marketing results were also lower amid seasonally limited opportunities.

Business and Operating Performance

Williams placed the Gilles West, Warton West, Huntington Connector and Rickman Creek lateral projects into service during the quarter. Together, they added more than 400 MMcf/d of contracted pipeline capacity.

Momentum Midstream expands Williams’ Haynesville position and connects with its Transco footprint along the Gulf Coast. The company is advancing the Shelby Connector and Delta Access projects to move additional Haynesville gas toward power and LNG customers. Management said Momentum’s operating performance has met expectations during the first two months of ownership.

In power, the first phase of Socrates had already entered full service in less than 18 months from commercialization. Management said the second and final phase would enter service later in the week, ahead of schedule and within budget. Operating experience from the initial facilities is being applied to commissioning, design and efficiency improvements for future projects.

Williams expects its next power projects to include additional high-quality hyperscale customers, longer contract terms and, in some cases, phased capacity expansion. The company said it has secured enough equipment, in cooperation with customers, to support its stated backlog and potentially additional capacity, with deliveries extending into the early 2030s.

In storage, Williams commercialized a 9.4 Bcf expansion of its Clay Basin facility on the Mountain West system. Management also cited additional storage opportunities under development in the Gulf region as customer demand and contracted rates increase.

Management Guidance

Williams maintained its 2026 adjusted EBITDA guidance of $8.3 billion-$8.5 billion. Management expects the existing business to finish in the upper half of that range.

Excluding any additional power projects announced before year-end, management expects year-end leverage of approximately 3.75x on a full-year run-rate basis for Momentum. The company’s internal leverage ceiling is 4.0x, leaving an estimated $2 billion of incremental capacity for initial spending on potential new power projects.

Management described leverage constraints as primarily a 2026-2027 issue. It expects stronger earnings growth and additional internally generated cash flow to expand financing capacity from 2028 onward. Williams continues to target adjusted EBITDA compound annual growth of at least 11% through 2030.

Growth capital guidance remained unchanged. The financing structure for future power projects will depend on their size, timing and development pace, with potential options including balance-sheet funding and third-party partnerships.

Risks and Watchpoints

• Near-term leverage: Williams expects leverage to remain relatively tight against its 4.0x ceiling during 2026 and 2027, particularly if it sanctions large power projects quickly.
• Project timing: The expected one or two year-end power announcements require completed commercial contracts, secured sites and sufficient permitting and execution readiness. Management acknowledged that timing could extend into 2027.
• Permitting: A Third Circuit remand involving the company’s New Jersey certificate could affect whether the referenced project enters service before next winter. Management does not expect a material effect on its financial forecast but said regional affordability could be affected.
• Financing costs: Management noted that market pricing has moved since its earlier Blackstone transaction, partly reflecting changes in 10-year Treasury yields. This could affect the cost of future partnership capital.
• Execution complexity: Power projects are complex and include load-following, commissioning and redundancy requirements. Williams expects experience and scale to improve efficiency, but project design and execution remain important variables.

Analyst Q&A Highlights

Power-project commercialization: Management said discussions are expanding to additional high-quality hyperscalers. Future agreements are expected to feature longer terms, broader customer diversification and clearer plans for phased capacity growth.

Power-project returns: Williams expects its return framework to hold as projects become larger. Management intends to use equipment scale, improved designs and operating lessons to lower customer costs while preserving fee-based, take-or-pay returns.

Equipment commitments: The company clarified that the $5.9 billion disclosed in equipment-related commitments is an aggregate figure that includes arrangements with cancellation provisions and customer backstops. Management said it should not be directly equated with the company’s 6 GW-plus opportunity set.

Transco expansion: Management described Transco’s expansion potential as extensive, ranging from smaller brownfield projects that can enter service before 2030 to larger projects supporting utility and LNG demand into the next decade.

Momentum synergies: Williams originally assumed acquisition synergies would begin materializing in 2028. Management said teams are now working to capture them earlier through operational integration, commercial activity and optimization across the combined Haynesville footprint.

LNG capacity strategy: Williams said the value of its 1.5 million-tonne-per-year agreement with Woodside has increased. The company expects to contract the capacity on a fixed-margin basis rather than build a large position exposed to international prices. The related pipeline project remains targeted for completion around the end of 2028.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Operator

Hello, and welcome to Williams Third Quarter Earnings 2026 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to Caroline Sardella, Director of Investor Relations. Please go ahead.

Caroline Sardella

Thank you, and good morning, everyone. Thank you for joining us and for your interest in Williams. Yesterday afternoon, we released our earnings press release and the presentation that our President and CEO, Chad Zamarin, 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; and Rob Lengo, our Executive Vice President of Corporate Strategic Development. .

In our presentation materials, you'll find a disclaimer related to forward-looking statements. This disclaimer is important and integral to our remarks, so please review it. Also included in the presentation materials are non-GAAP measures that we reconciled with generally accepted accounting principles. These reconciliation schedules appear at the back of today's presentation materials. So with that, I'll turn it over to Chad.

Chad Zamarin

Thanks, Caroline, and thank you all for joining us today. This was another strong quarter for Williams. We delivered record third quarter results, closed the Momentum acquisition to enhance our premier position in the Haynesville and placed 4 more expansion projects into service. And we are excited to announce that later this week, we will bring the second phase of [indiscernible] online. That's the story of this quarter, a team that delivers on commitments made while advancing the next set of opportunities. I and the management team are incredibly proud of how our teams are executing and building long-term value for shareholders. .

So starting with the numbers. Third quarter adjusted EBITDA grew 6% over the third quarter of 2025 and 9% year-to-date and achieving over $2 billion in EBITDA in Q3, sets an all-time record for third quarter earnings. Based on our performance through the first 9 months of the year, we continue to track towards the upper half of our 2026 adjusted EBITDA guidance and we are well positioned to deliver on the long-term growth target we raised last quarter to 11% plus compound annual EBITDA growth through 2030.

On September 3, we closed our acquisition of Momentum Midstream 1 month ahead of schedule, and the momentum assets integrate seamlessly into our existing Haynesville position and tie into our Transco footprint along the Gulf Coast. Integration is well underway, and our teams are already moving on the growth this combination unlocks starting with the Shelby Connector and Delta Access pipeline projects, both of which will expand the delivery of Haynesville gas into Transco for transport to power and LNG customers along the Gulf Coast.

Also during the quarter, we successfully placed 4 expansion projects into service. Gilles West, Warton West, the Huntington Connector and the Rickman Creek lateral, together adding over 400 million cubic feet per day of fully contracted take-or-pay pipeline capacity. Projects like these may not make major headlines on their own, but the growth compounds. Each project strengthens the reach and reliability of our system and together, they drive base business growth quarter after quarter.

In our Power business, you'll recall that last quarter, we brought the first phase of Socrates into full service in under 18 months from commercialization. Later this week, and again, ahead of schedule and within budget, our teams will place the second and final phase of Socrates into service. Socrates shows that when customers need comprehensive energy solutions combined with speed to power, Williams is a partner that will deliver. And the Williams team continues to do things the right way, delivering pipeline and power projects in a way that benefits communities and customers. Our teams prove every day that we can do both.

And Socrates serves as a blueprint for commercializing and scaling the next wave of power projects. On that note, we expect to announce 1 to 2 more power projects by year's end, so stay tuned and we expect those projects to expand our customer base with additional high-quality counterparties, along with significantly longer contract tenures.

Across our pipeline system, we continued to expand our growth runway during the quarter. On Transco, we announced a follow-on project to [indiscernible], the Southeast Supply Enhancement project -- and recall, [indiscernible] will be the largest project in the company's history by earnings contribution. The follow-on project creatively referred to as [indiscernible] is a 150-plus million cubic feet per day expansion project. We also upsized our Garden Connector project to 144 million cubic feet per day, just 1 quarter after signing initial customer agreements. That's the power of the Transco footprint. Every expansion lays the foundation for the next.

And now shifting to natural gas storage. As we've discussed, gas storage becomes increasingly valuable as natural gas demand continues to grow, especially as demand increases from LNG and power customers who need gas at the moment they call for it. During the third quarter, we commercialized another gas storage expansion project a 9.4 Bcf expansion of our Mountain West Clay Basin facility. We continue to benefit from our advantaged storage footprint, and we expect storage values to continue to increase and expansion opportunities to continue to commercialize.

So to sum it up, the team delivered record third quarter results while executing on projects that will drive growth through the end of the decade and beyond with a growing backlog that now extends well into the 2030s.

And with that, I'll turn it over to John for a deeper dive into the financials.

John Porter

Thanks, Chad. Our third quarter 2026 EBITDA was up 6% over '25, and we also delivered 10% growth in both adjusted EPS and AFFO for the quarter. For EBITDA, we are now up 9% over '25 for the first 9 months of the year. Bridging from last year's $1.92 billion to this year's $2.04 billion, our overall financial performance continues to be led by our transmission power and golf businesses, which improved $83 million or about 9%. Growth in this segment was led by the initial contributions from our Socrates project and continued growth from our natural gas storage businesses and pipeline expansions.

Our Northeast G&P business grew $37 million or 7%, primarily due to higher volumes across our major liquids-rich and dry gas systems. The West grew $34 million or about 9%, including initial contributions from the Momentum acquisition, which closed in early September as well as other higher Haynesville results, including a full quarter from our Louisiana Energy Gateway Pipeline and other Haynesville volume growth. Our sequent marketing business was a bit lower than last year with continued seasonally lower opportunities for this business.

Finally, our Other segment, which includes our upstream businesses, was down about $28 million, primarily due to our divestiture of the upstream Haynesville assets, which closed in January of '26. So again, third quarter EBITDA is up 6% with 10% growth in adjusted EPS and AFFO and EBITDA now up 9% year-to-date. So now, I'll offer a few thoughts on how we expect to finish for 2026. Turning to the full year outlook. Our strong financial performance and execution on the Socrates project gives us confidence in updating the full year outlook.

For full year 2026 adjusted EBITDA, our existing businesses continue tracking toward the upper half of our $8.3 billion to $8.5 billion range. On leverage, excluding the impacts of any additional power innovation projects that we announced prior to year-end, we would expect year-end leverage to be around 3.75x with the momentum acquisition on a full year run rate basis. And as we previously discussed, 3.75x provides another $2 billion of incremental capacity versus our internal 4x leverage ceiling to cover the initial spend on any additional power projects we announced before year-end.

Most importantly, though, as we previously discussed, the balance sheet leverage tightness is primarily an issue for '26 and '27 before the historic earnings growth we expect in '28 and beyond. But before we get to '28, we also expect to see sector-leading growth in '27. So ultimately, our financing plan for '27 will be guided by the scale and speed of our next power projects. In advance of those future announcements, our growth CapEx guidance remains unchanged. We're encouraged by the performance of our base business, our Momentum acquisition, the ongoing strong execution across our project portfolio and the continued commercialization of new business and we feel well positioned with our flexibility to fund additional power innovation opportunities, which will fuel an expansion of our targeted 11% plus EBITDA CAGR through 2030.

And with that, I'll turn it back over to Chad.

Chad Zamarin

Thanks, John. Before we open the line for questions, I want to come back to the message on Slide 4. The Williams story is one of making commitments and delivering results. And while we focus on delivering a strong finish to 2026, we also remain laser-focused on driving our growth through the end of the decade and beyond. As discussed, we expect to finish 2026 in the top half of our guidance range, and we are entering the next chapter of growth from a position of strength. Natural gas remains our country's most important, most abundant and most affordable domestic energy resource. And as a result, demand for natural gas continues to accelerate.

LNG exports are growing along the Gulf Coast, industrial reshoring is happening and power demand is surging for the first time in decades. Our country's growth will continue to be fueled by our ability to produce low cost, low emissions and highly reliable energy. Natural gas checks those boxes better than any other energy resource in America. And with the Momentum acquisition, our expanding pipeline network, our growing storage portfolio and our unique backlog of power projects, we have more ways to capture the demand for energy and translate it into value for our shareholders.

None of this happens without the dedication of our people, to the Williams team, thank you for working safely for serving our customers reliably and for building infrastructure, our country will depend upon for generations to come and thank you to our customers, partners and investors for your continued trust in Williams.

And finally, since today's election day, I want to encourage everyone on the call, including our Williams employees. If you haven't voted yet, I encourage you to make time to head to the polls. Decisions made at every level of government shape whether America can build the infrastructure it needs and whether energy will be reliable and affordable for the homes and businesses that depend on it. Our industry serves every community in this country. So all of us have a stake and should make our voices heard.

And with that, we'll now open the line for questions.

Operator

[Operator Instructions] Our first question comes from the line of Jeremy Tonet from JPMorgan Securities.

Question-and-Answer Session

Jeremy Tonet

Just wanted to start off, I guess, talking about the behind-the-meter commercialization, as you discussed, I'm not more deals expected by year-end. Is -- how should we think about, I guess, customer conversations here? Is this broadening out your counterparties? I mean, would these customers be similar to who you've signed so far. Just wondering, I guess, about the opportunity set if it's another large customer and if that leads to the potential for subsequent deals post ease?

Chad Zamarin

Yes. Thanks, Jeremy. Yes, the answer to your question is we have been advancing opportunities with additional customers -- we're only focused on really the highest quality hyperscalers and projects that we think fit really well within our strategic capabilities. And so I mentioned in the prepared remarks that we expect to expand and diversify the customer base will continue to be large, high-quality customers. And we also expect contracts to significantly extend in term [indiscernible].

And importantly, I know we've been asked about timing of announcements. I think that we -- I think the market -- I think our customers have seen the success of the team on Socrates. So I think we've got a very credible capability and solution. And we're also working on projects now that in addition to the speed to power also provide our ability to scale over time. And so part of what I would expect us to deliver our projects that not only look a lot like what we've announced so far, but provide more clarity into the length of the backlog and the scaling of projects over time.

Jeremy Tonet

Got it. That's helpful there. Maybe just continuing. These are kind of some first-of-the-kind type of projects for Williams, and you've had Socrates running for a little bit here. Just wondering, I guess, any learning so far. Your comfort here and if you think about kind of expanding your solution offerings here, how you think about that? .

Chad Zamarin

Yes. Thanks, Jim. I'll start, and I'm going to let Larry fill in. I'd tell you, we are just so proud of the team. Williams has a long history. I mean company for almost 120 years has been building complex, critical infrastructure, solving, frankly, some of the world's most challenging energy problems and the team did a great job building this business. The nice thing is it is a pretty clean extension of our existing capabilities. But yes, the team is learning every day. I mean, I've said this before, we're somewhat solving a new challenge, a new problem with existing technology. So every project will get more efficient. Every project will become more optimized and we're taking those lessons learned from every element of every project and deploying those to the next. But I'll let Larry speak to some of what he's seeing.

Larry Larsen

Yes. Thanks, Jeremy. This is Larry. Yes, I mean, as Chad said, really proud of the team. We've done some amazing work being able to deliver these projects. I mean they are complex, some of the first of its kind, be able to work with our customers on be able to manage the load following, and it's been great to see these projects to deliver exactly the way that we anticipated. We've now had some run time with Plato South, and we've seen that ramp up in utilization and it's performed exactly the way we want to and really excited for the team to get through the final commissioning this week on PLAY-DOH North and have the facility fully up and operational.

As Chad mentioned, there's always lessons learned as we go through these, both on how we commission and execute the projects, and we're taking those efficiencies into the next phase of projects, even the ones that we've commercialized to continue to further provide a better solution for our customers. And so I think you'll see that continue to play into the solutions we provide for the next wave of projects we're commercializing. And I think the great thing is counterparties are out there looking for people to work with, I think our ability to continue to deliver on projects at this scale, the speed, the complexity and navigate through all of the different things that come up on these types of projects. It's just continue to demonstrate Williams ability. And I think that's helping on the commercial front.

Operator

Our next question comes from the line of Praneeth Satish from Wells Fargo.

Praneeth Satish

So I guess with election day here upon us, when you look across your power backlog, particularly the projects that are closer to commercialization, I guess how sensitive is the timing of those projects to the elections? And specifically, the governor races, I guess, I'm really curious about Texas given the size of the opportunity there and whether that has any bearing on your time lines and backlog.

Chad Zamarin

Yes. I wouldn't say that, that's a gating issue for any of the discussions that we've been having. I think everybody is keeping an eye on the election and looking forward, I'd say, to getting through an election cycle. But I do believe, at the end of the day, places like Texas are going to be important for our country. We've got a very large energy resource. We've got a place where there's a lot of land available. And so we do think that Texas will be an important a part of the infrastructure story for data centers. But just in general, I mean, the Permian Basin, West Texas is our obviously, one of our most important energy resources in the country.

But we also spend a lot of time making sure we're focused on places where we can build with supportive communities. We can build projects that fit right within our existing kind of capability set. And so we feel really good about the projects that we're advancing, and we don't see the election being a gating item. Again, we've just been focused on making sure we can properly scope and design and optimize the projects that we're going to bring to market.

Praneeth Satish

Got it. And maybe switching gears on [indiscernible] can you talk about maybe the potential to upsize this project over time? And how large it could ultimately become? And then I guess from a capital efficiency standpoint, should we think about the economics of [indiscernible] similar to [indiscernible], which I think, was something like a 3 to 4x build multiple, if I remember correctly. Could this get to that level as well? .

Larry Larsen

Yes, Puneet, this is Larry. Thanks for the question. Yes, as we've announced right now, we've got 150 a day contracted on that, which is with the high credit utility counterparty. We did have a binding open season on that, that articulated the scope up to 390. We do have an additional customer for the remaining capacity on that. We've got some things to work through with that customer to firm up. So Ideally, we think there's a project that makes a lot of sense in that [ 3.90% ] range. Could it be expanded down the road definitely, but I think that would be done in a future phase of the project from a maybe a sassy Phase III if we stay creative with our naming convention. But as far as returns, I mean, these are pretty capital-efficient projects.

I would assume you would see this in a similar type of range that we've talked about in the 4 to 6x build multiple, but a lot of that's going to be dependent on once we finalize the scope and capital for this next phase of the project as we work through that final commercial contract.

Operator

Our next question comes from the line of from Spiro Dounis from Citi.

Spiro Dounis

I want to start with the compensation framework, this new disclosure in the 10-Q seem to point to a 10% to 16% EBITDA CAGR through 2030. So first, great to see alignment there on some of these targets you said that low end is congruent with the 11% plus target, but I wanted to dig in a little bit more on that high end I suspect it's a deliberate and achievable target by 2030. So I wanted to understand, I guess, what it would take to achieve that? How much M&A is contemplated versus organic? And then John, on the leverage side, this compensation target also requires leverage to be at or below 4x. Can you just maybe talk through the rank order of tools available to fund growth while keeping leverage in check?

Chad Zamarin

Yes. Thanks, Miro. This is Chad. I'll start and I'll let John then fill in the rest. First thing, yes, I mean, you picked up on -- we, as a management team and the Board are very focused on aligning the entire organization with the goals that we've articulated and what we think will be the sector-leading growth and delivery of shareholder value. And so the compensation structures are set to do that. We've talked about -- that doesn't change our existing compensation structures as well, which return on invested capital is the single most important metric that we measure for executive compensation.

So when you think about our growth, those numbers, I think, reflect what we do believe is achievable. If you look at the business and you look at how we've grown over the last 5 years, we've had 9% compound annual growth in earnings over the last 5 years, and we've done that with high-return projects. That creates a tremendous amount of capacity to to invest capital over the next 5 years and beyond. And so I think if you run the model on Williams, we've built a platform that can invest capital at attractive returns and can generate the type of growth that we're guiding towards. And so we feel really good about that range. And I would just say that we and the Board have made sure that the entire organization -- that's obviously we disclosed what was required for the officers, but the entire organization, we are making sure is highly focused on delivering the commitments that we're making to our shareholders. And John, do you want to fill in?

John Porter

Yes. Thanks for the question, Spiro. Really excited about the financial flexibility we've got for this pathway to 2030 and all this growth that we're chasing. For one, we've talked about it, our targeted leverage is 3.5 to 4x. So you see in the new goal that there's no payout if our balance sheet is over 4x. So we have to land sub-4x in our range that we're trying to navigate to is 3.5 to 4x. And we've talked about this before that we do have some tightness up against that 4x leverage primarily in '26 and '27.

But importantly, I think as you give beyond '27, we see enormous capacity that opens up. Chad just mentioned it as a result of all of the projects that are coming online and the earnings growth that we're going to see. I mean we're going to start seeing pretty great earnings growth even in '27, but it picks up even from there. So I think when you think about capacity and flexibility, we're going to have a lot of internally generated cash flow and we're going to have a lot of balance sheet capacity to continue to fuel additional growth. And as we chase that 16% high end. I'd tell you, everybody on our management team is super focused on winning at a 16% level. And it could include some bolt-ons along the way. But I think as we focus in on our plan, we're most focused in on our backlog and winning more than our fair share of the backlog primarily in the pipes and power parts of the business.

We think we've got really good line of sight into enough of an opportunity set to win again, more than our fair share in those spaces and achieve that 16%. We do have things in terms of financial flexibility, the Blackstone deal proved out that there's tremendous appetite to partner with us. So if along the way, we need to bring in partners, we can certainly do that as well. So we've got a lot of financial flexibility. We got, I think, big backlog as Chad mentioned, we're going to stay super focused though on the cash returns on invested capital. We don't want to get to the end of this and find that we've lost any ground in terms of the great track record we've had on cash returns on invested capital.

So we're going to have the growth. We're going to have the balance sheet strength and that's going to be because we've generated really strong cash returns on the capital we're investing.

Spiro Dounis

Got it. That's great to hear. I appreciate color on that front. Second question, just going back to power innovation and maybe sticking with the theme of some data points in the 10-Q. It looks like I pointed out almost $6 billion of long lead equipment purchases for projects not sanctioned yet. And so I'm trying to reconcile what that means with respect to your 6 gigawatt plus opportunity set. How to think about delivery time frames for this equipment and maybe the conversion rate so far on what's gone from an order turning into a sanctioned project.

John Porter

Yes. Thanks, Spiro. Yes, those 10-Q disclosures can be sometimes a little murky. In this case, I think you're talking about the $5.9 billion that's referred to in terms of commitments. And that does sort of pick up the aggregate -- yes, the aggregate sort of overall commitments that have been made around equipment that we would use to commercialize additional projects. .

I would say there's, again, murkiness around those kinds of disclosures because some of those have cancellation fees and things like that. And so we're not absolutely committed in that kind of that kind of plays into the way we've described how we've been able to build this really strong inventory of equipment. We've done it with backstop agreements. We've done it without really exposing company to the risk of loss associated with that equipment.

As far as the direct sort of relationship between the $5.9 billion and the 6 gigawatts, I wouldn't think that there's -- or 6 gigawatts plus. I don't think there's a real strong connection between those 2.

Chad Zamarin

Yes. And I would just add that those layer in our equipment that is on order and John think did a good job in describing how we've done that. We've worked collaboratively with customers to secure equipment and Frankly, I think we've said that we've got enough equipment secured on order in partnership with customers that would support the entire backlog that we've guided to and even a bit more. And those deliveries would layer in within -- from now, frankly, until, call it, the early 2030s, which when we talked about our backlog, we've kind of guided towards that being the targeted time line for projects, layering in projects in a disciplined way so that we've got predictable growth through the end of the decade. And now we're even seeing those opportunities crystallize into well into the 2030s and doing it in a way where we can be efficient in moving talent and capabilities from project to project. And so that's how we think about the equipment that's on order and the backlog that we have guided towards. .

Operator

Our next question comes from the line of Elvira Scotto from RBC Capital Markets.

Elvira Scotto

I want to pivot to the Momentum acquisition that closed ahead of schedule in September. Can you share some early integration learnings, any unexpected synergies or challenges you've encountered? And just how integration is progressing relative to your original plan?

Chad Zamarin

Yes, sure. Thanks for the question, Elvira. No, I mean look, integration is off to a really strong start. Really no surprises after the first 2 months of ownership. The performance of the business has been tracking with expectations. No, it's still early, but we are starting to capture synergies ahead of our -- of what we modeled and commercial and business development engagement is off to a strong start, both with existing and potential customers. Look, we've got lots of experience with acquisitions and integrating and we've worked out the bugs over the years. And so far, I'd say everything is going as planned. .

Elvira Scotto

Okay. Great. And then my next question, I'm going to pivot here again. So it looks like there's a bigger call on U.S. LNG, especially given for the security of supply. Obviously, you [indiscernible] on the pipeline side or your Haynesville assets. But this should also increase the value of that 1.5 million tonne per annum SPA you entered into with Woodside, the Louisiana LNG facility. How are you thinking about that capacity now as we kind of move closer to that start date?

Unknown Executive

Yes. Look, I mean, when we took that capacity as part of the Woodside investment, we did it for a couple of reasons. One, because we like the pairing of that with the pipeline and the marketing piece of the deal. We felt like the capacity was really going to be something that we could help bring additional volumes through our midstream system. And that's how we've been approaching it. And with the Momentum acquisition, it really puts us in an even stronger position to be able to interface with customers and offer international pricing as a service offering. And so we've already heard and seen interest from producers in the basin. -- that want international exposure. And so one of the things we're doing is talking about pairing that with gathering and compression and those types of services.

Chad Zamarin

Yes. And I'll just add, I think Rob said it well. We've got time. We can be patient. I think the project is on track. I know some of the team here actually went out to the Woodside project and got to go to site and Woodside is doing a great job on the LNG side. Our team is well underway on the pipeline side of the project. But we're going to be patient and disciplined. But I would expect, again, yes, that capacity has certainly increasing value, but our strategy will likely be to term out that capacity, make sure we capture fixed margin. We're not I think we've made it clear -- that is not an attempt to create a large international price exposure position. But I think Rob said it well. It's really a tool that allows us to offer more opportunity, a window into international markets for some of our producer customers that might not otherwise be able to access it. I don't know, Larry, anything you want to add on line 200 and how projects going?

Larry Larsen

Yes. I mean right now, everything is moving as planned. As the project is moving forward. We've gotten through all the permitting. Construction is online to be targeted for end of 2028 timeframe. So on that front, everything is going well. And I think now you'll see further opportunities for us to, as you think about our Haynesville position, continue to do further expansions as we see additional LNG demand grow within that corridor. .

We do see additional interest. We announced the Shelby Trough Connector project last quarter. And obviously, we're seeing a lot of additional interest on that. So I think you'll see not only with Line 200 and the Woodside LNG facility, but as we see additional LNG demand grow in that corridor, we're seeing definitely a lot more interest to get molecules from the Haynesville down into that corridor, which we're excited is going to really, I think, play into the advantage of the Premier Haynesville position that we built up.

Operator

Our next question comes from the line of John MacKay from Goldman Sachs.

John Mackay

I appreciate the comments on [indiscernible] Phase II earlier, but just wondering if you could talk broadly about kind of the remaining expansion capacity on Transco as a whole. And you kind of talked about potential later phases. Just anything you can frame up timing or maybe ultimate sizing would be helpful.

Chad Zamarin

Yes, I think as we've highlighted before, I mean, the expansion opportunity on Transco, it's almost limitless. I mean, there's so many different opportunities that you're seeing us continue to commercialized projects across the footprint on Transco. And not even just on Transco across all of our pipeline assets as we've obviously just announced the storage expansion on Mountain West earlier this year, we did the Silver spur expansion on Northwest Pipeline. So think on Transco, the [indiscernible] Phase 2 is just another example of ways that we can continue to optimize as our customers' demand grows in those regions, and we have very strategic bolt-on brownfield expansions that can continue to serve those markets.

So we've definitely got more projects in the backlog that we're working on, optimistic that we'll see additional projects commercialize as we go into 2027. And there'll be probably a myriad of some of them smaller scale, like we've seen like with [indiscernible] Access that we commercialized earlier this year to potentially some larger scale, larger capital expansions that the team is working on as well.

Unknown Executive

Yes. One of the nice things I've been mentioning to folks, and Larry mentioned it, we will continue to see some of the near-term smaller projects that can be delivered between now and the end of the decade. But we're already having really encouraging discussions regarding the next wave of large expansion projects that will help fuel growth, frankly, well beyond 2030 as we've seen a next wave of power projects that we expect our utility customers to need to supply with natural gas. Transco is the nation's most important artery for supplying utilities along that corridor, both Gulf Coast, Southeast, Mid-Atlantic, up into the Northeast.

And then LNG demand, we've been watching to see kind of the next wave of capacity. And again, we're seeing really strong signs that the next round of projects will commercialize. And so not only do we feel really good about the growth through the end of the decade, but we're starting to see projects and focus a lot of energy with the team on projects into the 2030s.

John Mackay

That's great. Second one for me. Can you just catch us up on where Nessy stands right now, kind of next steps to watch how you're feeling about the time line.

Unknown Executive

Yes. Thanks for the question. This is Lane Wilson. I'm sure beware the Third Circuit remanded our Jersey certificate. But there's nothing in that reman that has really jeopardize the projects. We're reevaluating right now the direction we're going to take, but there's -- as I said, there's nothing in that opinion that we think jeopardize that project. It's probably going to depend more on the level of cooperation we get from New Jersey, and we're working with them right now to figure out the next steps.

Chad Zamarin

Yes. I would just say, I think this reinforces the importance of permitting reform. I think had we seen the bill that is hopefully going to make it to the floor of the Senate, and Lane can give an update on that if you want to provide additional color. But that would have addressed what happened with this third circuit decision. And frankly, what this does is it's not going to have an impact on us from a financial forecasting perspective, we feel really good about the need for the project. but it could put at risk our ability to get it online in time for next winter.

And again, won't have a material impact on us, but will have an impact on affordability in New York and in that region. And so -- we are hopeful that the Senate is successful in voting on the bill, the bipartisan affordable affordability and Jobs Act, the Baha bill. And I don't know if you want to give a quick update on that, but it has some really strong provisions that would address I think a lot of the challenges that we've seen and would bring a lot more certainty and predictability to permitting projects.

Unknown Executive

Yes. I just don't think there's any doubt that had the Baha been in effect at the time the third circuit considered our permit, we'd still have that permit. So -- this is really critical for the country from all avenues in terms of energy, no matter where you look at it. There's a vote scheduled for November 9 closure vote in the Senate. I think it's going to get more than 60 votes. -- how many more than 60 votes it gets probably determines how quickly it makes it through the house. So we're optimistic. This is as good a chance as we have ever had to get meaningful permitting reform kind of across the full scale of infrastructure in this country. There are Democrats and Republicans have come out in favor of this, and we think it's going to happen.

Operator

Our next question comes from the line of Julien Dumoulin-Smith from Jefferies.

Julien Dumoulin-Smith

Look, maybe to take a couple of different directions here. First, going back to where we started at the top of the call, as it pertains to the project coming, just the size of the projects contemplated, -- are we seeing an increase? Or is just more about the cadence here and getting 1 to 2 before the end of the year? And then related within that, some discussion out there about just obtaining the adequate gas lateral easements, et cetera. Just where are you in just executing against that side of the equation across the portfolio projects underway today? If you can just update us briefly.

Chad Zamarin

Yes. Thanks, Julien. First, on the size of projects. I think I alluded to the fact that we are taking some time with the next round of projects to not just scope and commercialize the front-end speed to power component similar to the size and scale in scope of what you've seen so far out of the 5 projects that we have announced. But we are taking some time on several of our projects to to plan the further phasing and scaling of those projects.

Look, I think should even mention that on the first 5 projects we've announced, Larry was speaking to kind of the optimization lessons learned. There is also significant upside opportunity at each of those projects to unlock more capacity and scale those projects we sanctioned those projects based on very conservative assumptions to make sure that we can deliver the front-end speed to power. But there's a lot that we can unlock and scale over time.

Now as we look at projects where we have the time to plan, additional phases, I think you can expect that some of the projects in the backlog will have larger scale and we'll have phasing of capacity over time.

Your question about easements, -- maybe just expand on that a little bit. Was that on pipeline projects that you were referring to?

Julien Dumoulin-Smith

Or just the laterals for the will power side of the equation, right, and as much as you have a litany of these underway. Just if there's any issues, if you can be able to secure everything thus far.

Chad Zamarin

Yes. I would just say that our team does a great job of when we're citing, we're working very collaboratively. I think 1 of the capabilities that's really important that we bring -- and Rob has showed a slide before that shows the extent of the sequence footprint. Obviously, we've got an incredible core business footprint. I think one of the unique capabilities we bring is helping hyperscaler site projects and locations where we have high confidence that we can deliver gas supplies. And so we feel really good about the projects that we've been developing and teams had a lot of success. That has not been an issue that has prevented us from advancing projects.

And when I think about the projects that are in the backlog, all of them are [indiscernible] locations where we have high degree of confidence, either we've -- we've got a location that is rightly situated or we've got what we need or would expect to need from a pipeline capacity perspective.

Julien Dumoulin-Smith

Excellent. And just to say it even more directly, you would contemplate these which these are announced that the larger -- the future scope and phases would be announced simultaneously such that we could see overall a larger project announcement to the extent to which these have been a little bit longer in the weight they should indeed at least initially be announced as a longer duration, but also larger scope and project at the outset?

Chad Zamarin

Yes. Not every project, but I think that I would expect that you will see projects from us that that make that crystallized, commercialize a larger portion of the backlog and show larger scale phases within a single project. So yes. .

Julien Dumoulin-Smith

Got it. And just to clarify, even amidst the backdrop, do you feel confident on return staying the course here on these larger scope projects as defined earlier. .

Chad Zamarin

We do teams doing a great job. Yes. I do think we expect return framework to hold. I will say that 1 of the nice things about scaling projects is you can layer in larger equipment and more efficient power. And over time, the speed to power units can become more of your peaking units. And so you can also drive down the cost for the customer, preserve return, become more efficient As Larry discussed, bring the lessons learned from every project we're delivering. So the goal is to keep driving down the cost for the customer while preserving returns, expanding the customer base and extending contract duration. .

Operator

Our next question comes from the line of Robert Catellier from CIBC Capital Markets. .

Robert Catellier

Maybe a question here for John. I just wondered if what the ability and appetite is to the joint venture structure for future power projects. I asked the question because maybe the market's moved a tiny bit since the first agreement. So I'm curious about the level and the depth in the market given prices may have moved a little bit. .

John Porter

Yes. Thanks, Robert. Definitely, the prices have moved a bit from the 6.35% that we got on the deal with Blackstone back in July. And just the underlying movement in the 10-year treasuries has caused there to be a shift in the cost of capital for that. for that kind of arrangement. So we'll keep an eye on it. It certainly remains an option. We definitely hear all the time that there's very strong demand. We ran a very competitive process. I think we could reboot something like that. fairly quickly as well and again, drive toward the lowest available cost of capital for that kind of financing. But whether we decide to do that or not, I think it just depends on -- again, on the size and scale and speed of the next power projects that we are commercializing and definitely could be something that we do again but it's just one of several options, including just perhaps running the balance sheet a little bit hotter for a short period of time before all the earnings kicks in. But -- we have a lot of options. The insurance capital will continue to be something we'll be definitely looking at.

Robert Catellier

Okay. And maybe just a quick follow-up here on Momentum Midstream. It looks like it's off to a pretty good start and on a small sample size. But what do you see the the most upside, the most strategic upside when you look at how it interfaces with lag of Transco and some of your other U.S. Gulf Coast footprint. .

Chad Zamarin

Yes. I mean, look, I think the inventory and the breakeven prices and the price at which producers are going to act I mean 75% of the inventory behind that system is economic and virtually all of it is economic at 3.75. So we don't need $4 gas prices to support growth there. So as you see LNG and you see power demand continue to come online over the long term, we think that demand is going to provide a signal to bring that economic inventory into production. So it's really the strength of the inventory behind the system, combined with the demand from LNG and power that we see over the long term.

Larry Larsen

Yes. And this is Larry. I'll add to it. I mean, obviously, we only got a couple of months under our belt, but we do a very good job of integrating those operations teams. The commercial team is really under the hood now and really looking at the broader opportunity set in front of it. And I would say with this combined footprint and asset mix that we have across the Haynesville, both in Eastern Texas and Western Louisiana, I mean it's creating a lot of opportunities, not only on just winning new dedications and opportunities to expand, whether that's leg or [indiscernible] to be able to serve that growing demand, but it's also creating some great opportunities to optimize across the footprint we have.

We've got several projects right now both on our legacy system and momentum that are ramping up for growth going into next year. And so -- right now, everything is really positive. It's still early, only a couple of months in, but the integration with the team's operations organization is going extremely well. And the opportunity set that the commercial team is seeing is really robust. And so I think there's some great upside that will then, I think, layer into some hopefully downstream expansions as well as you think about Transco and the Delta Access project that hopefully will continue to upsize.

Unknown Executive

Yes. I'll just add credit to the team. There is a large team working the integration. Rob mentioned earlier, we're pretty conservative when we plan bolt-on transactions. We had assumed that synergies would start to materialize in 2028. But I can tell you, the team is focused on capturing every ounce of that now and as early as possible [indiscernible] synergy capture. But we've got a very large cross-functional team working every day on that integration and then also on unlocking those additional commercial opportunities. And I think been really excited to see the possibility start to emerge.

Operator

Our next question comes from the line of Manav Gupta from UBS.

Manav Gupta

Can you talk more about Clay Basin and your outlook for further storage expansions, please?

Larry Larsen

Yes, man, this is Larry. Thanks for the question. Yes, Clay Basin, I mean, this has been a nice expansion opportunity the team has been working on through the course of this year. Obviously, we've highlighted that we feel like storage capacity has lagged development over the last decade, and we're really starting to see additional interest in storage. This is a nice project on Mountain West system. We do have some additional projects that we're working on in the Gulf region. And I think we'll see some additional announcements on that in the upcoming quarters as the team is working through commercializing additional expansions in that space.

But I think we've seen a really strong response since we've done the acquisition of the Gulf storage business and Norte contracted rates continue to go up as demand for storage is increasing, and that's helping us facilitate some of these expansion projects.

Chad Zamarin

And just so that everyone kind of knows Clay Basin is the largest storage asset in the Rockies. And Larry mentioned is part of our Mountain West system. Mountain West really serves as a gateway between the Rockies and Western markets, there's really just no longer production when you go west of the Rockies, but there's tremendous demand. And that storage asset provides an incredibly important function as really a gateway between production and market. And so we think we'll continue to see the Mountain West asset has been a great asset. That team has done a great job. We've integrated those operations with our Northwest pipeline. So we gain a lot of synergies there and we can add additional services for customers.

And so -- and then as Larry mentioned, we still see strong value and growth across the Gulf Coast and our the remainder of our storage assets. So we would expect to continue to see these projects commercialize over time.

Manav Gupta

And how are you thinking about your remaining gathering portfolio post the divestiture of the Cook well gathering assets.

Chad Zamarin

Yes. I'll let Rob speak to it, but I think we really like it. So I think we mentioned we had a couple of small divestitures that show up, I think, in the reports throughout the course of the year. I think we recorded a gain or 2 as a result of those sales. But those were really small, I would say, almost off-system nonstrategic divestitures. Rob and the team are always looking at portfolio optimization, but I think we feel really good about where we sit today from from a gathering footprint perspective. We're talking about 35% to 40% demand growth for natural gas over the next 10 years, that's going to drive a tremendous amount of supply response that's going to be required. And so I think team has done a really good job of making sure we're -- we've got the right assets in the right locations.

Operator

Our next question comes from the line of Jason Gabelman from TD Cowen.

Jason Gabelman

Two on the power innovation side, if I could. The 1 to 2 projects by the end of the year, does that indicate that you have a much higher degree of confidence in 1 project than another? Or is that more just timing and 1 can slip into the beginning of 2027.

Chad Zamarin

Yes. I think importantly, thank you. That's a good question because we don't time announcements based on earnings call dates or even New Year's Eve and New Year's Day. But we feel pretty good about our ability to commercialize projects over the course of the next few months. And I think at the end of the day, that doesn't mean the projects aren't still moving. We kind of -- we don't like to get public with our announcements until we have a fully signed and executed commercial agreement.

And also with our customer partners until we're permit ready and we've made sure we've got sites secured and we've got a lot of the the derisking of the project already complete. And I think we've continued to say we expect 1 or 2 of those to hit the finish line by the end of the year. But I think that, that also means that you will see additional projects we would expect commercialized into 2027 and beyond. And so we're not just specifically targeting a date, those projects continue to advance, but we do feel pretty good that 1 or 2 of those will likely be signed by the end of the year.

Jason Gabelman

Great. My other is just on the financing of these projects. And -- it sounds like you're evaluating different options and the right balance sheet size. But to the extent that you do think that financing or additional capital inflows are necessary to move projects forward. Should we expect that to be announced concurrent with positive FIDs on new power innovation projects? Or is it something that we should expect after projects are sanctioned similar to what happened with the earlier -- with the financing earlier this year.

John Porter

Yes. This is John. Thanks for the question. And I think a little bit of it depends on the specific size, again, at scale and speed associated with the particular projects. But -- in a case where we're talking about a large-scale project that maybe scales over time, we'll definitely be trying to give some color about how that project scales over time. We'll also be trying to give some real clarity about, generally speaking, how we plan to finance the project. I can't say how specific that would be at the time, but we'll definitely try to give you a good sense of how we're thinking about financing, especially around the bigger projects. .

Operator

Our last question comes from Craig Shere from Touhy Brothers.

Craig Shere

Just wanted to briefly dig into a little further the sustained 5x economics for new power innovation projects. So the legacy projects were overengineered and the PPAs themselves have 5x EBITDA economics outside of synergies with other assets and the ability to monetize the excess generation capacity. Is it fair to think about the potential new project announcements with much longer-term tenors as significantly derisking the assets because of longer tenors, but also to some small degree at least, minimizing some of the upside beyond 5x because the excess capacity is called for.

Chad Zamarin

Thanks, Craig, for the question. No, I think that we're going to target maintaining economics through efficiency. But at the end of the day, our business is making sure we've got predictable fee-based take-or-pay cash flows that are the foundation for the returns that we're sanctioning and then we look to create upside beyond that. So we're not embedding kind of extremes speculative upside into the base economics of a project, but we are working hard to drive efficiency, drive down the cost for the customer, make the project a much more optimized design and scope and scale. But I would still expect that with each of these projects, we're creating a platform upon which we're going to find additional upside and opportunity.

Craig Shere

Maybe I could just quickly ask you slightly differently. -- on these longer-term scaling projects -- prospective opportunities, would they be as proportionately overengineered as the legacy projects?

Chad Zamarin

Okay. No, I think that's a good question. I do think we'll learn over time how to be more efficient with excess capacity. So I do think that is an opportunity for us to -- as we operate and learn load profiles, we may be able to have less of redundancy from an efficiency perspective. So I do think that, that is a fair observation.

Operator

This concludes our question-and-answer session. I would now like to turn the call over to Chad for closing remarks. .

Chad Zamarin

Great. Thanks, Haley, and thank you, everyone, for your participation in today's call. Have a great day, and we look forward to seeing you soon.

Operator

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