Williams (WMB) rolled out its next big expansion, the Power Express project on the Transcontinental Gas Pipe Line (Transco), in the company’s 1Q25 earnings update. The 950 MMcf/d expansion will serve increased power generation demand in Virginia beginning in 3Q30.
Commercial details are limited, but management said it expects returns similar to the Southeast Supply Enhancement (SESE) project. SESE is rumored to have a sub-4.0x build multiple, so Power Express would set WMB up for a great return.
East Daley Analytics has been waiting for an expansion to serve “Data Center Alley” in Northern Virginia, as the region has the largest expected load growth from data centers in the country. In the Data Center Demand Monitor, EDA is tracking 20 GW of announced data center projects in Virginia, shown in the table above. The largest project concentrations are in Prince William County (3.6 GW), Hanover County (3.2 GW) and Loudoun County (3.0 GW).
Data centers have been a hot topic for midstream investors, yet very few pipelines are in a position to serve Data Center Alley. Transco and Columbia Gas are the two largest systems that can connect Northern Virginia to gas supply. Outside the region, WMB is targeting new load across the Southeast from data centers planned along the Transco route (see pipeline map from the Data Center Demand Monitor).
While Williams has captured a significant share of the market with the 950 MMcf/d expansion, East Daley believes there is still opportunity for TC Energy (TRP) and Global Infrastructure Partners (GIP) to execute an expansion on Columbia. WMB management disclosed that Power Express was a scalable expansion, so there is further upside for Williams in Northern Virginia before TRP and GIP can bring a project to market. – Zach Krause Tickers: TRP, WMB.
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