This Constitution Will Need Amending

Executive Summary: Market Movers: Despite support from President Trump, Williams’ Constitution Pipeline faces a challenging road ahead. Rigs: The US rig count totaled 484 for the week of April 13, down 5% from 1Q25 and 7% lower than 2Q24. Rigs on Western Midstream (WES) systems have been climbing. Flows: Volumes averaged 48.7 Bcf/d for the week of April 19, up 2% from 1Q25. Kinder Morgan (KMI) has experienced one of the steepest declines in flow samples since 2Q24. Calendar: MPC, MPLX & ET Earnings 5/6 | KNTK, WES & GEL Earnings 5/8 | ENB, PBA & PAA Earnings 5/9.

Market Movers:

President Trump recently voiced support for reviving Williams’ (WMB) long-defunct Constitution Pipeline, reigniting interest in the shelved Northeast project. But even with a nod from Energy Secretary Chris Wright and a cautiously open stance from WMB, the path forward remains steep.

Originally proposed over a decade ago, the 121-mile pipeline would transport 650 MMcf/d from Susquehanna County, PA to western New York, interconnecting with the Tennessee Gas and Iroquois pipelines. The project stalled in 2016 after failing to secure a New York water permit, despite a strategic lease agreement on Iroquois and a $683MM cost estimate (~7.0x multiple).

Today, Constitution faces a different world. Several original backers — like Cabot Oil & Gas (now part of Expand Energy) and Duke Energy (acquired by Enbridge) — are gone. WMB would likely need to rebuild the shipper roster from scratch.

Downstream capacity is also constrained. Tennessee Gas Pipeline operates at 76% average utilization (peaking at 98%) at Station 249, while Iroquois runs at 91% through Brookfield, with peak flows exceeding rated capacity (see figures). Without expansions on both systems, there’s no clear path to market for new volumes.

Competitive capital also works against it. WMB has a backlog of lower-risk projects with sub-5.0x build multiples and strong producer backing, mostly aimed south toward the Gulf. Constitution would have to leapfrog them all.

Assuming infrastructure enhancements materialize at TGP and Iroquois, WMB could source the volumes from the Susquehanna Supply Hub gathering system and raise 2027 EBITDA by ~$165MM, in addition to incremental earnings from the pipeline itself. But we are not holding out hope as recent setbacks, such as the challenges encountered by Mountain Valley Pipeline, cast serious doubts on new greenfield projects in the Northeast.

Rigs:

• Western Midstream (WES) has experienced strong Y-o-Y and Q-o-Q rig count growth. This increase is driven by high utilization across its core Delaware and DJ basin systems, supported by sustained drilling activity from Occidental (OXY).
• ONEOK (OKE), including the recently acquired EnLink Midstream assets, has seen a decline in rig activity over the past quarter and year. Activity has fallen in the Permian and Williston basins, where key operators Diamondback Energy (FANG) and ConocoPhillips (COP) have scaled back rigs on OKE systems

Flows:

• Kinder Morgan (KMI) has experienced one of the steepest declines in 2Q25 flow samples, down 15% from 2Q24, due primarily to reduced rig activity and curtailed production in the ArkLaTex region. This pullback is largely a response to weak natural gas prices.
• Western Midstream (WES) has seen Y-o-Y increases in flow sample, primarily from its Powder River and Uinta basin assets in the Rockies region

Calendar: