Stay informed with free updates
Simply sign up to the Oil & Gas industry myFT Digest — delivered directly to your inbox.
One of the biggest US pipeline companies is preparing to sue its arch-rival, underscoring the legal strife plaguing America’s energy infrastructure buildout.
Alan Armstrong, chief executive of Williams, told the Financial Times his company would seek “big dollars” in damages from Energy Transfer — led by prominent Donald Trump donor Kelcy Warren — as it ratchets up a legal stand-off over allegations of anti-competitive behaviour.
The two pipeline giants have for months been entangled in a courtroom brawl over Energy Transfer’s objections to its competitor’s development of a $1bn conduit to ship natural gas from a Louisiana oilfield to the Gulf Coast. Armstrong said Williams was now taking the matter further.
“The next step for us will be to file for damages that are due from their efforts to stop us,” he said in an interview. “These are big dollars . . . it’s not an immaterial amount of money, that’s for sure.”
Energy Transfer argued in court that Williams had not done enough to ensure the safety of crossing points between the pipeline development and its own conduits.
In a statement to the Financial Times, Energy Transfer said it would “never regret standing up for the safety of its assets and of those whose property we cross, despite the misguided claims of Williams’ CEO.”
The stand-off highlights the pitfalls delaying pipeline construction in the US. It is a particular problem in natural gas as demand swells, driven by surging exports and rising domestic consumption needed to satisfy huge growth in electricity usage for AI and data storage.
Tensions over pipelines have risen in recent years amid a proliferation of lawsuits over permits, as climate activists seek to slow the construction of projects they say will lock in dependence on fossil fuels for decades. It is unusual for companies to lodge objections of this nature to rival projects.
“Most operators that we deal with are responsible operators,” said Armstrong. “I think Energy Transfer is very much an outlier on this and I think they’re going to regret their actions ultimately on this.”
Williams’ Louisiana Energy Gateway project is designed to ship 1.8bn cubic feet a day of natural gas from the Haynesville Shale across Louisiana and Texas to liquefied natural gas terminals on the Gulf Coast. It had been scheduled to come online this year, but the company says the clash with Energy Transfer has delayed the start date until the second half of 2025.
“Holding stuff up like that — there’s consequences in that,” said Armstrong.
Energy Transfer has also opposed pipeline projects by other developers including Momentum Midstream and DT Midstream over crossings with its own network. The dispute with Momentum was settled earlier this month, allowing the company to proceed with its project. DT moved its planned pipeline to avoid crossing Energy Transfer’s operations.
“The truth is that unlike the other parties we have settled with, Williams has not provided the critical information we need to adequately review the impact of the large number of crossings they are seeking,” Energy Transfer said in its statement. “We must wonder as to Williams’ motives in its resistance to sharing this information as this is a standard process when requesting pipeline crossings.”
Litigation surrounding projects has caused a sharp drop-off in US pipeline developments, with less than 1bn cu ft/d of interstate gas capacity added in 2023, the lowest on record, according to the Federal Energy Regulatory Commission, compared with the 28bn cu ft/d added in 2017.
It has also caused costs to spiral: the 300-mile Mountain Valley Pipeline in Virginia came online this month after a barrage of legal challenges, six years late and at a cost of $7.85bn, more than double initial projections.
However, the vast majority of litigation has been led by environmental activists rather than companies and Energy Transfer’s actions in Louisiana have riled industry and politicians.
Jeff Landry, Louisiana’s governor, said in his previous role as attorney-general that Energy Transfer’s litigation, if successful, risked establishing a precedent that “could make it nigh impossible (or at least cost-prohibitive) to bring many energy products to market”.
Energy Transfer and Williams have been bitter rivals since a $33bn takeover bid led by Warren collapsed in 2016, prompting years of litigation. In October, the Delaware Supreme Court ruled Energy Transfer must pay Williams $495mn for walking away from the proposed deal.
Read the full article here
