What changed in this filing

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Item 1. Business

2024-02-21 compared with 2023-02-27 · 177 added, 154 removed, 417 unchanged (44% of the section changed)

20 unchanged sentences

Our interstate natural gas pipelines transport and store natural gas for a broad mix of customers, including local natural gas distribution companies, public utilities, municipalities, direct industrial users, electric power generators, and natural gas marketers and producers.

Most of our interstate natural gas transmission businesses are fully contracted under long-term firm reservation contracts with high credit quality customers.

Most of our interstate natural gas transmission businesses are fully

contracted under long-term firm reservation contracts with high credit quality customers.

These contracts have various expiration dates and account for the major portion of our regulated businesses.

Additionally, we offer storage services and interruptible transportation services under shorter-term agreements.

Transco’s and Northwest

Pipeline’s three largest customers in 2022 accounted for approximately 23 percent and 51 percent, respectively, of their total operating revenues.

Our top ten customers of our interstate natural gas pipelines in 2023 accounted for approximately 47 percent of our regulated interstate natural gas transportation and storage revenues.

Gathering, Processing, and Treating Assets

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During 2023, our facilities gathered and processed gas and crude oil for approximately 230 customers.

Our top ten customers accounted for approximately 70 percent of our gathering and processing fee revenues and NGL margins from our noncash commodity-based agreements.

Our top ten customers accounted for approximately 70 percent of our gathering and processing fee revenues and NGL

margins from our noncash commodity-based agreements.

We believe counterparty credit concerns in our gathering and processing businesses are significantly mitigated by the physical nature of our services, where we gather at the wellhead and are therefore critical to a producer’s ability to move product to market.

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In 2023, our three largest natural gas marketing customers accounted for approximately 10 percent of our gross natural gas marketing sales, and our three largest NGL marketing customers accounted for approximately 43 percent of our NGL marketing sales.

Our gas marketing business markets natural gas from the production at our upstream properties and provides asset management and the wholesale marketing, trading, storage, and transportation of natural gas for a diverse set of natural gas and electric utilities, municipalities, power generators, and producers, and moves gas to markets through transportation and storage agreements on strategically positioned assets.

Our pipeline agreements connect with multiple pipelines that provide our customers with access to diverse sources of supply and various natural gas markets.

The southeastern market served by our Gas & NGL Marketing Services segment is the fastest growing natural gas demand region in the United States and expands our natural gas marketing activities, as well as optimizes our pipeline and storage capabilities.

Our gas marketing business markets natural gas and provides natural gas asset management and wholesale marketing, trading, storage, and transportation for a diverse set of natural gas and electric utilities, municipalities, power generators, and producers, including for our own upstream properties.

Additionally, our gas marketing business moves and optimizes natural gas to markets through transportation and storage agreements on our own strategically positioned assets.

Our gas and NGL marketing services provide customers with access to diverse sources of supply and to various natural gas demand markets, including the southeastern and gulf coast regions which are the fastest growing natural gas demand regions in the United States.

We purchase natural gas for storage when the current market price paid to buy and transport natural gas plus the cost to store and finance the natural gas is less than an estimated, forward market price that can be received in the future, resulting in positive net product sales.

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As we are acting as an agent, our natural gas marketing revenues are presented net of the related costs of those activities.

In addition, all of our natural gas marketing derivative activities qualify as held for trading purposes, which requires net presentation in the Consolidated Statement of Income.

In addition, all of our natural gas marketing derivative activities qualify as held for trading purposes, which requires net presentation in our Consolidated Statement of Income.

Prior to the integration in 2022 of our historical gas marketing business with the acquired Sequent gas marketing business, natural gas marketing revenues and costs for our historical business were reported on a gross basis.

Following the integration in 2022, the entire natural gas marketing portfolio is considered held for trading purposes, and the related revenues are therefore presented net of the related costs of those activities in 2022.

Our NGL marketing business transports and markets our equity NGLs from the production at our processing plants, NGLs from the production at our upstream properties, and also NGLs on behalf of third-party NGL producers, including some of our fee-based processing customers, as well as the NGL volumes owned by RMM and Discovery.

The NGL marketing business bears the risk of price changes in these NGL volumes while they are being transported to final sales delivery points.

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We experience significant earnings volatility from the fair value accounting required for the derivatives used to hedge a portion of the economic value of the underlying transportation and storage portfolio as well as upstream related production.

However, the unrealized fair value measurement gains and losses are generally offset by valuation changes in the economic value of the underlying production or transportation and storage contracts, which is not recognized until the underlying transaction occurs.

However, the unrealized fair value measurement gains and losses are generally offset by

valuation changes in the economic value of the underlying production or transportation and storage contracts, which is not recognized until the underlying transaction occurs.

Crude Oil Transportation and Production Handling Assets

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Generally, fixed-monthly fees associated with production handling and export revenues are recognized on a units-of-production basis utilizing either contractually determined maximum daily quantities or expected remaining production.

CIAC arrangements are recognized based on a units of production basis, utilizing expected remaining production.

CIAC arrangements are recognized on a units of production basis, utilizing expected remaining production.

Our crude oil transportation business is supported mostly by major oil producers with long-cycle perspectives.

Standalone, Market-Based Rate Natural Gas Storage Assets

Our standalone, market-based rate natural gas storage assets are presented in our Transmission & Gulf of Mexico segment as described under the heading “Business Segments” and include our NorTex assets acquired in August 2022 and our Gulf Coast storage assets acquired in January 2024.

These natural gas storage assets provide natural gas storage services in interstate commerce under the jurisdiction of the FERC pursuant to the Natural Gas Act or Section 311 of the Natural Gas Policy Act.

We are authorized to charge and collect market-based rates for all of the services that these natural gas storage assets provide.

We store natural gas for a broad mix of customers, including local natural gas distribution companies, public utilities, municipalities, direct industrial users, electric power generators, and natural gas marketers and producers.

Most of these natural gas storage businesses are fully contracted under long-term firm reservation contracts with high credit quality customers.

The contracts have various expiration dates and account for the major portion of the entities’ businesses.

Additionally, we offer storage services and interruptible transportation services under shorter-term agreements.

The three largest customers of this business in 2023 accounted for approximately 32 percent of its total operating revenues.

BUSINESS SEGMENTS

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Our reportable segments are comprised of the following business activities:

• Transmission & Gulf of Mexico is comprised of our interstate natural gas pipelines, Transco, Northwest Pipeline, and MountainWest, and their related natural gas storage facilities, as well as natural gas gathering and processing and crude oil production handling and transportation assets in the Gulf Coast region, including a 51 percent interest in Gulfstar One, a 50 percent equity-method investment in Gulfstream, and a 60 percent equity-method investment in Discovery.

Transmission & Gulf of Mexico also includes natural gas storage facilities and pipelines providing services in north Texas.

• Northeast G&P is comprised of our midstream gathering, processing, and fractionation businesses in the Marcellus Shale region primarily in Pennsylvania and New York, and the Utica Shale region of eastern Ohio, as well as a 65 percent interest in our Northeast JV which operates in West Virginia, Ohio, and Pennsylvania, a 66 percent interest in Cardinal which operates in Ohio, a 69 percent equity-method investment in Laurel Mountain, a 50 percent equity-method investment in Blue Racer, and Appalachia Midstream Investments.

This segment also includes our NGL storage facilities, an undivided 50 percent interest in an NGL fractionator near Conway, Kansas, a 50 percent equity-method investment in OPPL, a 50 percent equity-method investment in RMM, a 20 percent equity-method investment in Targa Train 7, and a 15 percent equity-method investment in Brazos Permian II.

• Gas & NGL Marketing Services includes our NGL and natural gas marketing and trading operations.

This segment includes risk management and transactions related to the storage and transportation of natural gas and NGLs on strategically positioned assets.

• Transmission & Gulf of Mexico is comprised of our interstate natural gas pipelines, Transcontinental Gas Pipe Line Company, LLC (Transco) , Northwest Pipeline LLC (Northwest Pipeline), and MountainWest Pipelines Holding Company (MountainWest), and their related natural gas storage facilities, as well as natural gas gathering and processing and crude oil production handling and transportation assets in the Gulf Coast region, including a 51 percent interest in Gulfstar One LLC (Gulfstar One), a 50 percent equity-method investment in Gulfstream Natural Gas System, L.L.C.

(Gulfstream), and a 60 percent equity-method investment in Discovery Producer Services LLC (Discovery).

Transmission & Gulf of Mexico also includes natural gas storage facilities and pipelines providing services in north Texas, Louisiana, and Mississippi.

• Northeast G&P is comprised of our midstream gathering, processing, and fractionation businesses in the Marcellus Shale region primarily in Pennsylvania and New York, and the Utica Shale region of eastern Ohio, as well as a 65 percent interest in our Ohio Valley Midstream LLC (Northeast JV) which operates in West Virginia, Ohio, and Pennsylvania, a 66 percent interest in Cardinal Gas Services, L.L.C.

(Cardinal) which operates in Ohio, a 69 percent equity-method investment in Laurel Mountain Midstream, LLC (Laurel Mountain), a 50 percent equity-method investment in Blue Racer Midstream LLC (Blue Racer),

and our equity-method investments with an approximate average 66 percent interest in multiple gas gathering systems in the Marcellus Shale region (Appalachia Midstream Investments).

• West is comprised of our gas gathering, processing, and treating operations in the Rocky Mountain region of Colorado and Wyoming, the Barnett Shale region of north-central Texas, the Eagle Ford Shale region of south Texas, the Haynesville Shale region of east Texas and northwest Louisiana, the Mid-Continent region which includes the Anadarko and Permian basins, and the DJ Basin of Colorado which includes RMM, a former 50 percent equity-method investment in which we acquired the remaining ownership interest in November 2023.

This segment also includes our NGL storage facilities, an undivided 50 percent interest in an NGL fractionator near Conway, Kansas, a 50 percent equity-method investment in Overland Pass Pipeline Company LLC (OPPL), a 20 percent equity-method investment in Targa Train 7 LLC (Targa Train 7), and a 15 percent equity-method investment in Brazos Permian II, LLC (Brazos Permian II).

• Gas & NGL Marketing Services is comprised of our NGL and natural gas marketing and trading operations, which includes risk management and transactions related to the storage and transportation of natural gas and NGLs on strategically positioned assets.

Detailed discussion of each of our reportable segments follows.

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Transmission & Gulf of Mexico

This segment includes the Transco interstate natural gas pipeline that extends from the Gulf of Mexico to the eastern seaboard, the Northwest Pipeline interstate natural gas pipeline, the MountainWest interstate natural gas pipeline, as well as natural gas gathering, processing and treating, crude oil production handling, and NGL fractionation assets within the onshore, offshore shelf, and deepwater areas in and around the Gulf Coast states of

Texas, Louisiana, Mississippi, and Alabama.

This segment also includes various petrochemical and feedstock pipelines in the Gulf Coast region and natural gas pipelines and storage facilities located in north Texas.

Transco is an interstate natural gas transmission company that owns and operates a 9,700-mile natural gas pipeline system, which is regulated by the FERC, extending from Texas, Louisiana, Mississippi, and the Gulf of Mexico through Alabama, Georgia, South Carolina, North Carolina, Virginia, Maryland, Delaware, Pennsylvania, and New Jersey to the New York City metropolitan area.

Interstate Natural Gas Pipeline Assets

Transco is an interstate natural gas transmission company that owns and operates an approximately 9,700-mile natural gas pipeline system, which is regulated by the FERC, extending from Texas, Louisiana, Mississippi, and the Gulf of Mexico through Alabama, Georgia, South Carolina, North Carolina, Virginia, Maryland, Delaware, Pennsylvania, and New Jersey to the New York City metropolitan area.

The system serves customers in Texas and 12 southeast and Atlantic seaboard states, including major metropolitan areas in Georgia, North Carolina, Washington, D.C., Maryland, New York, New Jersey, and Pennsylvania.

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Transco has natural gas storage capacity in four underground storage fields located on or near its pipeline system or market areas and operates two of these storage fields.

During 2023, Transco began partial early service on the Regional Energy Access expansion project, which added approximately 0.5 MMdth/d of firm transportation capacity to its pipeline.

In addition, Transco added almost 0.1 MMdth/d of firm transportation capacity by converting certain interruptible transportation feeder capacity to firm transportation.

Transco also has storage capacity in an LNG storage facility that it owns and operates.

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Northwest Pipeline

Northwest Pipeline is an interstate natural gas transmission company that owns and operates a 3,900-mile natural gas pipeline system, which is regulated by the FERC, extending from the San Juan basin in northwestern New Mexico and southwestern Colorado through Colorado, Utah, Wyoming, Idaho, Oregon, and Washington to a point on the Canadian border near Sumas, Washington.

Northwest Pipeline provides services for markets in Washington, Oregon, Idaho, Wyoming, Nevada, Utah, Colorado, New Mexico, California, and Arizona, either directly or indirectly through interconnections with other pipelines.

Northwest Pipeline is an interstate natural gas transmission company that owns and operates an approximately 3,900-mile natural gas pipeline system, which is regulated by the FERC, extending from the San Juan basin in northwestern New Mexico and southwestern Colorado through Colorado, Utah, Wyoming, Idaho, Oregon, and Washington to a point on the Canadian border near Sumas, Washington.

Northwest Pipeline provides services for

markets in Washington, Oregon, Idaho, Wyoming, Nevada, Utah, Colorado, New Mexico, California, and Arizona, either directly or indirectly through interconnections with other pipelines.

At December 31, 2023, Northwest Pipeline’s system had a design capacity totaling approximately 3.8 MMdth/d.

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Northwest Pipeline owns a one-third undivided interest in the Jackson Prairie underground storage facility in Washington.

Northwest Pipeline also owns and operates a LNG storage facility in Washington.

These storage facilities have an aggregate working natural gas storage capacity of 10.4 Bcf, which is substantially utilized for third-party natural gas.

Northwest Pipeline also owns and operates an LNG storage facility in Washington.

These storage facilities have an aggregate working natural gas storage capacity of approximately 10.4 Bcf, which is substantially utilized for third-party natural gas.

These natural gas storage facilities enable Northwest Pipeline to balance daily receipts and deliveries and provide storage services to customers.

MountainWest Acquisition

On February 14, 2023, we closed on the acquisition of 100 percent of MountainWest Pipelines Holding Company.

MountainWest is an interstate natural gas transmission company that owns and operates an approximately 2,000-mile natural gas pipeline system which is regulated by the FERC.

The system is comprised of MountainWest Pipeline, LLC;

MountainWest Overthrust Pipeline, LLC;

a 50 percent equity-method interest in White River Hub, LLC;

and 56 Bcf of natural gas storage capacity, including the Clay basin underground storage reservoir in Utah.

MountainWest is located in the Rocky Mountains near six producing areas, including the Greater Green River basin in Wyoming, the Uinta basin in Utah, and the Piceance basin in Colorado.

At December 31, 2023, MountainWest’s system has a design capacity totaling 8.0 MMdth/d.

Standalone Natural Gas Storage Assets

Gulf Coast Storage Acquisition

On January 3, 2024, we closed on the acquisition of a strategic portfolio of approximately 230 miles of natural gas transmission pipelines and six underground storage facilities with a capacity of approximately 115 Bcf of natural gas storage across Louisiana and Mississippi and direct access to LNG export facilities and interstate pipelines.

These assets expand our natural gas storage footprint in the Gulf Coast region.

North Texas Assets (NorTex)

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In addition to providing gas supply to power generation in north Texas, these assets also provide storage services for Permian gas directed toward growing Gulf Coast LNG demand.

MountainWest Acquisition

On February 14, 2023, we closed on the acquisition of 100 percent of MountainWest Pipelines Holding Company.

MountainWest is an interstate natural gas pipeline company that owns and operates an approximately 2,000-mile natural gas pipeline system and provides transportation and underground natural gas storage services in Utah, Wyoming, and Colorado.

At February 14, 2023, the MountainWest system had a design capacity totaling 8.0 MMdth/d.

The system is located in the Rocky Mountains near six producing areas, including the Greater Green

River, Uinta, and Piceance basins.

MountainWest also owns and operates 56 Bcf of natural gas storage capacity, including the Clay basin underground storage reservoir in Utah.

Gas Transportation, Processing, and Treating Assets

Gas Gathering, Transportation, Processing, and Treating Assets

The following tables summarize the significant operated assets of this segment:

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_____________

(1) Includes 100 percent of the statistics associated with operated equity-method investments.

(1) Includes 100 percent of the statistics associated with our operated equity-method investment Discovery.

Crude Oil Transportation and Production Handling Assets

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75 10 60% Central Gulf of Mexico

(1) Statistics reflect 100 percent of the assets from our 51 percent interest in Gulfstar One.

(2) Includes 100 percent of the statistics associated with operated equity-method investments.

(1) Statistics reflect 100 percent of the assets from our 51 percent interest in Gulfstar One floating production system (FPS).

(2) Includes 100 percent of the statistics associated with our operated equity-method investment Discovery.

Certain Equity-Method Investments

Gulfstream is a 745-mile interstate natural gas pipeline system extending from the Mobile Bay area in Alabama to markets in Florida, which has a capacity to transport 1.4 Bcf/d.

We own a 50 percent equity-method investment in Gulfstream.

We share operating responsibilities for Gulfstream with the other 50 percent owner.

We operate and own a 60 percent interest in the facilities of Discovery.

Discovery’s assets include a 600 MMcf/d cryogenic natural gas processing plant near Larose, Louisiana, a 35 Mbbls/d NGL fractionator plant near Paradis, Louisiana, and a 594-mile offshore natural gas gathering and transportation system in the Gulf of Mexico.

Discovery’s mainline has a gathering inlet capacity of 600 MMcf/d.

Discovery’s assets also include a crude oil production handling platform with capacity of 10 Mbbls/d and gas handling and separation capacity of 75 MMcf/d.

Transmission & Gulf of Mexico Operating Statistics

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Interstate natural gas pipeline throughput (MMdth/d) (1) (2)

20.4 16.9 16.2

Gathering volumes (Bcf/d) 0.26 0.29 0.28

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_____________

(1) Includes 100 percent of the volumes associated with operated equity-method investments.

(1) Tbtu converted to MMdth at one trillion British thermal units = one million dekatherms.

Certain Equity-Method Investments

Gulfstream is a 745-mile interstate natural gas pipeline system extending from the Mobile Bay area in Alabama to markets in Florida, which has a capacity to transport 1.4 Bcf/d.

We own a 50 percent equity-method investment in Gulfstream.

We share operating responsibilities for Gulfstream with the other 50 percent owner.

We own a 60 percent interest in and operate the facilities of Discovery.

Discovery’s assets include a 600 MMcf/d cryogenic natural gas processing plant near Larose, Louisiana, a 32 Mbbls/d NGL fractionator plant near Paradis, Louisiana, and a 594-mile offshore natural gas gathering and transportation system in the Gulf of Mexico.

Discovery’s mainline has a gathering inlet capacity of 600 MMcf/d.

Discovery’s assets also include a crude oil production handling platform with capacity of 10 Mbbls/d and gas handling and separation capacity of 75 MMcf/d.

(2) Includes volumes for natural gas transmission assets acquired in the MountainWest Acquisition after the purchase on February 14, 2023, including 100 percent of the volumes associate with the operated equity-method investment White River Hub, LLC.

Further, the amounts for the acquired assets are averaged over the period owned, not over the entire year.

(3) Includes 100 percent of the volumes associated with our operated equity-method investments Gulfstream and Discovery.

Northeast G&P

Gas Gathering, Processing, and Treating Assets

This segment includes our natural gas gathering, compression, processing, and NGL fractionation businesses in the Marcellus and Utica Shale regions in Pennsylvania, West Virginia, New York, and Ohio.

The following tables summarize the significant operated assets of this segment and non-operated Blue Racer:

The following tables summarize the significant operated assets of this segment:

Natural Gas Gathering Assets

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The listed inlet capacity of 0.6 Bcf/d is incremental capacity to the Cardinal gathering capacity of 0.7 Bcf/d.

(3) Includes 100 percent of the statistics associated with operated equity-method investments and non-operated Blue Racer.

(4) Natural gas processing facilities owned by non-operated Blue Racer.

(3) Includes 100 percent of the statistics associated with operated equity-method investments.

Other NGL Operations

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The remaining mixed NGL stream from the de-ethanizer is then transported via our 50-mile NGL pipeline and fractionated at either our Moundsville or Harrison County, Ohio, fractionation facility.

The resulting products are then transported on truck, rail, or pipeline.

resulting products are then transported on truck, rail, or pipeline.

Ohio Valley Midstream provides residue natural gas take away options for our customers with interconnections to three interstate transmission pipelines.

Certain Equity-Method Investments

Appalachia Midstream Investments

Through our Appalachia Midstream Investments, we operate 100 percent of and own an approximate average 66 percent interest in the Bradford Supply Hub gathering system and own an approximate average 68 percent interest in the Marcellus South gathering system, together which consist of approximately 1,049 miles of gathering pipeline in the Marcellus Shale region with the capacity to gather 5,700 MMcf/d of natural gas.

The majority of our volumes in the region are gathered from northern Pennsylvania, southwestern Pennsylvania, and the northwestern panhandle of West Virginia in core areas of the Marcellus Shale.

We operate the assets primarily under long-term, 100 percent fixed-fee gathering agreements that include significant acreage dedications.

Additionally, some Marcellus South agreements have MVCs.

Laurel Mountain

We operate and own a 69 percent interest in a joint venture, Laurel Mountain, which includes a 1,147-mile gathering system in western Pennsylvania with the capacity to gather 0.9 Bcf/d of natural gas.

Laurel Mountain has a long-term, dedicated, volumetric-based fee agreement, with exposure to natural gas prices, to gather the anchor customer’s production in the western Pennsylvania area of the Marcellus Shale.

Additionally, certain Laurel Mountain agreements have MVCs.

We operate and own a 50 percent interest in Blue Racer.

Blue Racer is a joint venture to own, operate, develop, and acquire midstream assets in the Utica Shale and certain adjacent areas in the Marcellus Shale.

Blue Racer’s assets include 616 miles of gathering pipelines and the Natrium complex in Marshall County, West Virginia, with a cryogenic processing capacity of 800 MMcf/d and fractionation capacity of approximately 134 Mbbls/d.

Blue Racer also owns the Berne complex in Monroe County, Ohio, with a cryogenic processing capacity of 400 MMcf/d, and 101 miles of NGL and condensate pipelines connecting Natrium to Berne.

Blue Racer provides gathering, processing, and marketing services primarily under percent-of-liquids and fixed-fee agreements.

Northeast G&P Operating Statistics

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NGL equity sales (Mbbls/d) 4 3 6

(1) Includes 100 percent of the volumes associated with operated equity-method investments, including the Laurel Mountain Midstream partnership;

and the Bradford Supply Hub and the Marcellus South Supply Hub within Appalachia Midstream Investments.

Periods after November 18, 2020, have been updated to include non-operated Blue Racer volumes.

Further, the amounts for Blue Racer presented for 2020 are averages for the 44 days over which we included Blue Racer, not averages over the entire year.

Certain Equity-Method Investments

Appalachia Midstream Investments

pipeline in the Marcellus Shale region with the capacity to gather 5,330 MMcf/d of natural gas.

The majority of our volumes in the region are gathered from northern Pennsylvania, southwestern Pennsylvania, and the northwestern panhandle of West Virginia in core areas of the Marcellus Shale.

We operate the assets under long-term, 100 percent fixed-fee gathering agreements that include significant acreage dedications and, in the Bradford Supply Hub, a cost of service mechanism.

Additionally, some Marcellus South agreements have MVCs.

Laurel Mountain

We own a 69 percent interest in a joint venture, Laurel Mountain, that includes a 1,145-mile gathering system that we operate in western Pennsylvania with the capacity to gather 0.9 Bcf/d of natural gas.

Additionally, certain Laurel Mountain agreements have MVCs.

We own a 50 percent interest in Blue Racer which is operated by Blue Racer Midstream Holdings, LLC (BRMH).

BRMH (previously named Caiman Energy II, LLC), a former equity-method investment, is a consolidated entity following our acquisition of a controlling interest in November 2020 and the remaining interest in September 2021.

BRMH’s primary asset is a 50 percent interest in Blue Racer, accounted for as an equity-method investment.

Blue Racer is a joint venture to own, operate, develop, and acquire midstream assets in the Utica Shale and certain adjacent areas in the Marcellus Shale.

Blue Racer’s assets include 741 miles of gathering pipelines, and the Natrium complex in Marshall County, West Virginia, with a cryogenic processing capacity of 800 MMcf/d and fractionation capacity of approximately 134 Mbbls/d.

Blue Racer also owns the Berne complex in Monroe County, Ohio, with a cryogenic processing capacity of 400 MMcf/d, and NGL and condensate pipelines connecting Natrium to Berne.

Blue Racer provides gathering, processing, and marketing services primarily under percent-of-liquids and fixed-fee agreements.

(1) Includes 100 percent of the volumes associated with operated equity-method investments, including Laurel Mountain and Blue Racer;

as well as the Bradford Supply Hub and Marcellus South within Appalachia Midstream Investments.

Gas Gathering, Processing, and Treating Assets

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Eagle Ford Shale Texas 1,258 0.5 100% Eagle Ford Shale

Haynesville Shale (1) Louisiana & Texas 929 4.7 100% Haynesville Shale, Bossier Shale

Haynesville Shale

Louisiana & Texas 987 5.2 100% Haynesville Shale, Bossier Shale

Permian Texas 113 0.1 100% Permian

Mid-Continent Oklahoma & Texas 1,697 0.2 100% Miss-Lime, Granite Wash, Colony Wash

Non-consolidated:

Rocky Mountain Midstream Colorado 208 0.6 50% Denver-Julesburg

472 0.8 100% Denver-Julesburg

Natural Gas Processing Facilities

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Parachute Garfield Co., CO 1.0 5 100% Piceance

Non-consolidated:

Fort Lupton Weld Co., CO 0.3 50 50% Denver-Julesburg

Keenesburg I Weld Co., CO 0.2 40 50% Denver-Julesburg

Fort Lupton (1)

Weld Co., CO 0.3 50 100% Denver-Julesburg

Keenesburg I (1)

Weld Co., CO 0.2 40 100% Denver-Julesburg

Front Range (2)

0.1 12 100% Denver-Julesburg

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(1) Includes statistics for assets acquired in the Trace Acquisition.

(2) Includes 100 percent of the statistics associated with operated equity-method investments.

(1) Fort Lupton and Keenesburg I are a part of RMM which became a wholly owned subsidiary during 2023.

(2) Purchased as a part of the DJ Basin Acquisitions on November 30, 2023.

DJ Basin Acquisitions

On November 30, 2023, we closed on the acquisition of 100 percent of Cureton Front Range, LLC and the acquisition of the remaining 50 percent interest in Rocky Mountain Midstream Holdings LLC, both of which operate midstream assets in Colorado’s DJ Basin.

The Cureton Acquisition includes gas gathering pipelines and two processing plants, one of which is currently idled.

The RMM Acquisition was the purchase of our partner’s 50 percent interest, resulting in 100 percent ownership by us.

RMM includes a natural gas gathering pipeline, an approximate 100-mile crude oil transportation pipeline, and natural gas processing assets in the DJ Basin.

It also includes crude oil storage and compression assets.

Trace Acquisition

On April 29, 2022, we closed on the acquisition of 100 percent of Gemini Arklatex, LLC through which we acquired the Haynesville Shale region gas gathering and related assets of Trace Midstream.

The purpose of this

acquisition was to expand our footprint into the east Texas area of the Haynesville Shale region, increasing in-basin scale.

Other NGL Operations

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We also own a 189-mile NGL pipeline from our fractionator near Conway, Kansas, to an interconnection with a third-party NGL pipeline system in Oklahoma.

Certain Equity-Method Investments

Overland Pass Pipeline

We operate and own a 50 percent interest in OPPL.

OPPL is capable of transporting 255 Mbbls/d of NGLs and includes approximately 1,035 miles of NGL pipeline extending from Opal, Wyoming, to the Mid-Continent NGL market center near Conway, Kansas, along with extensions into the Piceance and DJ basins in Colorado and the Bakken Shale in the Williston basin in North Dakota.

Our equity NGL volumes from our Wyoming plants and our Willow Creek facility in Colorado are dedicated for transport on OPPL under a long-term transportation agreement.

NGL volumes from RMM are also transported on OPPL.

Brazos Permian II

We own a 15 percent interest in Brazos Permian II, a privately held Permian basin midstream company.

Targa Train 7

We own a 20 percent interest in Targa Train 7, a Mt.

Belvieu, Texas, fractionation train.

West Operating Statistics

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________________

(1) Includes volumes for gathering assets acquired in the Trace Acquisition after the purchase on April 29, 2022.

Further, the amounts for the acquired assets presented for 2022 are averaged over the period owned, not over the entire year.

(2) Includes 100 percent of the volumes associated with operated equity-method investments.

Trace Acquisition

On April 29, 2022, we closed on the acquisition of 100 percent of Gemini Arklatex, LLC through which we acquired the Haynesville Shale region gas gathering and related assets of Trace Midstream.

The purpose of this acquisition was to expand our footprint into the east Texas area of the Haynesville Shale region, increasing in-basin scale.

Certain Equity-Method Investments

Overland Pass Pipeline

We operate and own a 50 percent interest in OPPL.

OPPL is capable of transporting 255 Mbbls/d of NGLs and includes approximately 1,035 miles of NGL pipeline extending from Opal, Wyoming, to the Mid-Continent NGL market center near Conway, Kansas, along with extensions into the Piceance and Denver-Julesberg basins in Colorado and the Bakken Shale in the Williston basin in North Dakota.

Our equity NGL volumes from our Wyoming plants and our Willow Creek facility in Colorado are dedicated for transport on OPPL under a long-term transportation agreement.

NGL volumes from our RMM equity-method investment are also transported on OPPL.

Rocky Mountain Midstream

We operate and own a 50 percent interest in RMM.

RMM includes a natural gas gathering pipeline, an approximate 100-mile crude oil transportation pipeline, and natural gas processing assets in Colorado’s Denver-Julesburg basin.

It also includes crude oil storage and compression assets.

Brazos Permian II

We own a 15 percent interest in Brazos Permian II, a privately held Permian basin midstream company.

Targa Train 7

We own a 20 percent interest in Targa Train 7, a Mt.

Belvieu, Texas, fractionation train.

(1) Includes volumes for gathering assets acquired in the Trace Acquisition after the purchase on April 29, 2022 as well as volumes for gathering assets acquired in the DJ Basin Acquisitions after the purchase on November 30, 2023.

Further, the amounts for the acquired assets are averaged over the period owned, not over the entire year.

(2) Includes 100 percent of the volumes associated with operated equity-method investment RMM prior to acquisition of the remaining 50 percent interest on November 30, 2023.

Gas & NGL Marketing Services

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The Sequent Acquisition in July 2021 significantly increased the scope of our natural gas marketing operations.

Our NGL marketing business transports and markets our equity NGLs from the production at our processing plants, NGLs

from the production at our upstream properties, and also NGLs on behalf of third-party NGL producers, including some of our fee-based processing customers.

See the Gas and NGL Marketing section of Service Assets, Customers, and Contracts in Item 1.

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Natural Gas (Bcf/d) (1)

7.05 7.20 7.70

NGLs (Mbbls/d)

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Further, the amounts for the acquired assets presented for 2021 are averaged over the period owned, not over the entire year.

(2) 2021 amounts have been updated to reflect revised natural gas and NGL volumes.

2020 amounts have been updated to reflect revised NGL volumes.

Other includes our upstream operations and minor business activities that are not reportable segments, as well as corporate operations.

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Under the agreement, the third party operates the upstream position and develops the undeveloped acreage.

When a certain drilling hurdle is met, the third party’s interest in new wells increases to 75 percent.

The third party met this drilling hurdle in early 2023.

We retain ownership in the undeveloped acreage until a separate acreage earning hurdle is met, at which time remaining undeveloped acreage will be conveyed to the third party resulting in the third party owning 75 percent and us owning 25 percent.

The third party’s interest in new wells increased to 75 percent in early 2023 when a certain drilling hurdle was met.

We retained ownership in the undeveloped acreage until a separate acreage earning hurdle was met in the fourth quarter of 2023, at which time remaining undeveloped acreage was conveyed to the third party resulting in the third party owning 75 percent and us owning 25 percent.

Operating Statistics

2023 2022 2021

(Annual Average Amounts)

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To ensure compliance with these provisions, PHMSA performs pipeline safety inspections and has the authority to initiate enforcement actions.

In October 2019, PHMSA published the first of three rules that would be a part of the Mega Rule.

The Mega Rule was more than 10 years in the making and since October 2019, PHMSA has also published Rules 2 and 3 as a part of the Mega Rule implementation.

At the end of 2021, PHMSA published Rule 3 of the Mega Rule with an implementation date in May 2022.

Rule 3 was also called The Gas Gathering Rule and expanded Federal Pipeline Safety oversight to more than 400,000 miles of pipeline across all operators, including approximately 5,400 miles and 4,500 miles of our regulated and unregulated pipelines, respectively.

The rule established Federal pipeline safety oversight on previously unregulated gas gathering pipelines.

The rule limits the use of “incidental gathering pipelines” to 10 miles in length or less.

The rule also creates a new category of regulated gas gathering pipelines that are located in rural locations and will be subject to certain reporting and safety standards.

New regulations in Rule 3 include requirements for public awareness, emergency response, damage prevention, incident notification, and annual reporting.

As a result of the rule, we revised numerous procedures and are now reporting based on the expanded scope as required by regulation.

In August 2022, PHMSA published Rule 2, which is the last in the three part Mega Rule set of regulations.

Certain portions of Rule 2 go into effect in May 2023 with the remaining portions taking effect in February 2024.

Rule 2 went into effect in May 2023, but a Stay of Enforcement until February 2024 limited the amount of the regulation that was implemented.

Rule 2 contains new corrosion control requirements, new requirements for repair criteria outside of high consequence areas (HCAs), inspections to be performed after extreme weather events or natural disasters, management of change, and other integrity management related rule changes.

We are evaluating procedures that will need to be updated to maintain compliance and are also analyzing anticipated cost impacts.

PHMSA’s new rule, Requirement of Valve Installation and Minimum Rupture Detection Standards, went into effect in October 2022.

The rupture monitoring and emergency response standards are applicable to existing pipelines, but the installation of rupture mitigation valves (RMVs) is not retroactive and only applies to new pipelines and significant pipeline replacements.

This new rule establishes criteria for how operators must monitor and respond to potential ruptures on their system.

It also outlines requirements for the installation of RMVs or Alternative Equivalent Technology to allow for quicker isolation after an incident has occurred.

In response to the new regulation, Williams has updated all applicable procedures and is developing implementation plans as a result of the rulemaking.

Since the rule was published in 2022, we have worked to understand the regulatory changes and modify our procedures as needed.

In total, we have modified more than 20 Williams procedures and forms to account for the Rule 2 changes.

All procedures will be in effect when the February 2024 Stay of Enforcement expires.

In May 2023, PHMSA published the Gas Pipeline Leak Detection and Repair Notice of Proposed Rule Making (NPRM).

While this regulation has not been published as final and is still subject to change, the rule could institute many new requirements including:

increased survey and patrol frequencies, new timelines for repairing and mitigating leaks, strict performance standards for advanced leak detection programs, and other additional requirements focused on reducing methane emissions.

We have been actively working to provide comments on the rule and are working to understand the overall impact if implemented as currently written.

Pipeline Integrity Regulations

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We estimate that the cost to be incurred in 2024 associated with this program to be approximately $163 million.

Management considers costs associated with compliance with the rule to be prudent costs incurred in the ordinary course of business and, therefore, recoverable through Northwest Pipeline’s and Transco’s rates.

Management considers costs associated with compliance with the rule to be prudent costs incurred in the ordinary course of business and, therefore, recoverable through Transco, Northwest Pipeline, and MountainWest’s rates.

We have an enterprise-wide Liquid Integrity Management Plan that we believe meets the PHMSA final rule that was issued pursuant to the requirements of the Pipeline Safety Improvement Act of 2002.

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These pipelines are also subject to the liquid pipeline safety and integrity regulations discussed above since both Louisiana and Texas have adopted the integrity management regulations defined in PHMSA.

Outer Continental Shelf Lands Act

Our offshore gas and liquids pipelines located on the outer continental shelf are subject to the Outer Continental Shelf Lands Act, which provides in part that outer continental shelf pipelines “must provide open and nondiscriminatory access to both owner and non-owner shippers.”

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“Risk Factors” — “Our operations are subject to environmental laws and regulations, including laws and regulations relating to climate change and greenhouse gas emissions, which may expose us to significant costs, liabilities, and expenditures that could exceed our expectations,” and Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Environmental” and “Environmental Matters” in Part II, Item 8.

Financial Statements and Supplementary Data — Note 17 – Contingent Liabilities and Commitments of Notes to Consolidated Financial Statements.

Financial Statements and Supplementary Data — Note 17 – Contingencies and Commitments.

Our competitive strategy spans all our product and service offerings.

We have a narrowed natural gas value chain focus that supports the exceptional reliability and quality services that are valued by our customers.

Gathering and Processing

Competition for natural gas gathering, processing, treating, transportation, and storage, as well as NGLs transportation, fractionation, and storage continues to increase as production from shales and other resource areas continues to grow.

Our midstream services compete with similar facilities that are in the same proximity as our assets.

Our midstream services compete with similar facilities that are in close proximity to our assets.

We face competition from companies of varying size and financial capabilities, including major and independent natural gas midstream providers, private equity firms, and major integrated oil and natural gas companies that gather, transport, process, fractionate, store, and market natural gas and NGLs, as well as some larger exploration and production companies that are choosing to develop midstream services to handle their own natural gas.

Our gathering and processing agreements are generally long-term agreements that may include acreage dedication.

Competition for natural gas volumes is primarily based on reputation, commercial terms (products retained or fees charged), array of services provided, efficiency and reliability of services, location of gathering facilities, available capacity, downstream interconnects, and latent capacity.

We believe our significant presence in traditional prolific supply basins, our solid positions in growing shale plays, our expertise and reputation as a reliable operator, and our ability to offer integrated packages of services position us well against our competition.

Competition for natural gas volumes is primarily based on reputation, flexibility of commercial terms (including but not limited to fees charged, products retained, volume commitments), available capacity, array and quality of services provided, as well as efficiency, reliability, and safety of services.

We believe our significant presence in key supply basins, our expertise and reputation as a reliable and safe operator, our commitment to sustainability, and our ability to offer integrated packages of services position us well against our competition.

Regulated Interstate Natural Gas Transportation and Storage

The market for supplying natural gas is highly competitive and new pipelines, storage facilities, and other related services are expanding to service the growing demand for natural gas.

Additionally, pipeline capacity in many growing natural gas supply basins is constrained causing competition to increase among pipeline companies as they strive to connect those basins to major natural gas demand centers.

Additionally, pipeline capacity in many natural gas supply basins is constrained and facing more regulation and opposition causing competition to increase among pipeline companies as they strive to connect those basins to major natural gas demand centers.

In our business, we predominately compete with major intrastate and interstate natural gas pipelines.

In the last few years, local distribution companies have also started entering into the long-haul transportation business through joint venture pipelines.

The principle elements of competition in the interstate natural gas pipeline business are based on capacity available, rates, reliability, quality of customer service, diversity of supply, and proximity to customers and market hubs.

Some local distribution companies are also involved in the long-haul transportation business through joint venture pipelines.

The principle elements of competition in the interstate natural gas pipeline business are based on available capacity, rates, reliability, quality of customer service, diversity and flexibility of supply, and proximity or access to customers and market hubs.

We face competition in a number of our key markets, and we compete with other interstate and intrastate pipelines for deliveries to customers who can take deliveries at multiple points.

Natural gas delivered on our system competes with alternative energy sources used to generate electricity such as hydroelectric power, coal, fuel oil, and nuclear.

Future demand for natural gas within the power sector could be increased by regulations limiting or discouraging coal use or could be adversely affected by laws mandating or encouraging renewable power sources.

Significant entrance barriers to build new pipelines exist, including federal and growing state regulations and public opposition against new pipeline builds, and these factors will continue to impact potential competition for the foreseeable future.

Natural gas delivered on our system competes with alternative energy sources used to generate electricity such as hydroelectric power, solar, wind, coal, fuel oil, and nuclear.

Future demand for natural gas within the power sector could be increased by growing power demand and by regulations limiting or discouraging coal use in power generation.

Conversely, natural gas demand could be adversely affected by laws mandating or encouraging solar and wind power sources or restricting the use of natural gas.

Significant entrance barriers to build new pipelines exist, including increased federal and state regulations and elevated public opposition against new pipeline builds, and these factors will continue to impact potential competition for the foreseeable future.

However, we believe our past success in working with regulators and the public, the position of our existing infrastructure, established strategic long-term contracts, and the fact that our pipelines have numerous receipt and delivery points along our systems provide us a competitive advantage, especially along the eastern seaboard and northwestern United States.

Energy Management and Marketing Services

Our Gas & NGL Marketing Services segment competes with national and regional full-service energy providers, producers, and pipelines marketing affiliates or other marketing companies that aggregate commodities with transportation and storage capacity.

Our Gas & NGL Marketing Services segment competes with national and regional full-service energy providers, producers, and pipeline marketing affiliates or other marketing companies that aggregate commodities with transportation and storage capacity.

For additional information regarding competition for our services or otherwise affecting our business, please refer to Part 1, Item 1A.

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HUMAN CAPITAL RESOURCES

We are committed to maintaining a work environment that enables us to attract, develop, and retain a highly skilled and diverse group of talented employees who help promote long-term value creation.

We are committed to maintaining a work environment that enables us to attract, develop, and retain a highly skilled and diverse group of talented employees who help promote long-term value creation now and into the clean energy future.

As of February 1, 2024, we had 5,601 full-time employees located throughout the United States.

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We continue to advance our safety-first culture by developing and empowering our employees to operate our assets in a safe, reliable, and customer-focused way.

We strive to continuously improve safety and work towards zero safety incidents.

When a safety hazard is recognized, every employee is empowered to stop work activities, make changes to enhance safety, and share the lessons learned with the organization on how we made it right.

For 2021, safety and environmental-focused goals and related metrics comprised 10 percent of our annual incentive program for employees, and included our Loss of Primary Containment Events Reduction and High Potential Near Miss to Incident Ratio.

For 2022, these goals included our Loss of Primary Containment Events Reduction, a new Behavioral Near Miss to Incident Ratio goal aimed to focus attention on behaviors that are the leading causes of incidents, as well as a new Methane Emissions Reduction goal focusing on our efforts to reduce greenhouse gas emissions.

We strive to continuously improve safety and implement best practices to progress towards zero safety incidents.

When a safety hazard is recognized, every employee has the authority and responsibility to stop work activities, make changes to enhance safety, and share the lessons learned with the organization on how we made it right.

For 2022 and 2023, these goals included our Loss of Primary Containment Events Reduction, a Behavioral Near Miss to Incident Ratio goal aimed to focus attention on behaviors that are the leading causes of incidents, as well as a Methane Emissions Reduction goal focusing on our efforts to reduce greenhouse gas emissions by safely and reliably operating and maintaining assets.

These three metrics comprise 15 percent of our annual incentive program for employees, and reinforce the importance of incident prevention and our commitment to environmental and safety-focused improvements.

For 2022, our Behavioral Near Miss to Incident Ratio and Methane Emissions Reduction goals outperformed the established targets, and while Loss of Primary Containment Events were reduced, they fell short of the overall reduction target.

These metrics align the focus of the organization, from entry level to executives, and create a connection to annual compensation on environmental and safety performance.

For 2023, our Behavioral Near Miss to Incident Ratio and Methane Emissions Reduction goals outperformed the established targets, however, our Loss of Primary Containment Events goal fell short of the reduction targets.

Workforce Health, Engagement, and Development

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Cultivating a healthy work environment increases productivity and promotes long-term value creation.

We provide a comprehensive total rewards program that includes base salary, an all-employee annual incentive program, retirement benefits, and health benefits, including wellness and employee assistance programs.

We provide a comprehensive total rewards program that includes base salary, an annual incentive program, retirement benefits, and health benefits, including wellness and employee assistance programs.

We provide employees with company-paid life insurance, disability coverage, and paid parental leave for both birth and non-birth parents, as well as adoption assistance.

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In order to attract and retain top talent, we create and are committed to maintaining a safe, inclusive workplace where employees feel valued, heard, respected, and supported in their personal and professional development.

Our Employee Development Council is a cross-functional, cross-enterprise advisory board that works to understand the needs of the business by providing input on, and advocating for, employee development initiatives.

Additionally, we support strong employee engagement by encouraging open dialogue regarding professional development and succession planning.

We offer robust corporate and technical training programs to support the professional development of our employees and add long-term value to our business.

Our Learning and Training Council defines and maintains an agile governance structure that ensures training plans are effective and aligned to business needs and employee development.

We utilize employee surveys and employee led advisory councils to ensure we understand the needs of the business from the perspective of our employees regarding engagement, development and inclusion.

Additionally, we support employee engagement through formal programming including professional development, mentoring, and succession planning.

We provide comprehensive corporate and technical training programs that are agile and robust.

These programs are designed to support the professional, skill, and technological development of our employees, which in turn creates a competitive advantage for our business.

We are committed to adding long-term value to our business by investing in our employees’ growth and development.

In addition to our internal development programming, we also support external development opportunities to further enhance our employees’ professional and technical skills.

Performance is measured considering both the achieved results associated with attaining annual goals and observable skills and behaviors based on our defined competencies that contribute to workplace effectiveness and career success.

Including the defined competencies in our annual performance program illustrates our emphasis on, and commitment to, achieving results in the right way.

Including the defined competencies in our annual performance assessments illustrates our emphasis on, and commitment to, achieving results in the right way.

Additionally, we are committed to strengthening the communities where we operate through philanthropic giving and volunteerism.

We support Science, Technology, Engineering, and Math education initiatives, environmental conservation and first responder efforts, and the work of United Way agencies across the United States.

The Compensation and Management Development Committee of our Board of Directors oversees the establishment and administration of our compensation programs, including incentive compensation and equity-based plans, as well as the oversight of human capital management, including diversity and inclusion, and development.

We support Science, Technology, Engineering, and Math education initiatives, environmental conservation, first responder efforts, and the work of United Way agencies across the United States.

The Compensation and Management Development Committee of our Board of Directors oversees executive compensation and equity-based compensation plans and the material risks associated with our compensation

program, as well as the oversight elements of human capital management, including diversity and inclusion, and talent development.

Diversity & Inclusion

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ERG members participate in community events, volunteer, lend professional and personal support to one another, and promote inclusion across the company.

They also provide input to the leadership team.

They also have executive sponsors and provide input to the leadership team.

We are committed to helping all employees develop and succeed.

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Our Diversity and Inclusion Council, which includes members of the executive officer team, organizational and operational leaders, and individual employees, promotes policies, practices, and procedures that support the growth of a high-performing workforce where all individuals can achieve their full potential.

The council serves as the governing body over enterprise diversity and inclusion initiatives, including a quarterly candid conversation meeting for all employees, 10 active ERGs, and annual awards that recognize an outstanding leader and an individual contributor who champion inclusion.

As of December 31, 2022, our Board of Directors includes 12 members, 11 of whom are independent members, and one-quarter of which are women.

As part of the director selection and nominating process, the Governance and Sustainability Committee annually assesses the Board’s diversity in areas such as geography, gender, race and ethnicity, and age.

The council serves as the governing body over enterprise diversity and inclusion initiatives, including enterprise diversity and inclusion events, organized and hosted by one of our 10 ERGs, and our annual awards that recognize an outstanding leader and an individual contributor who champion inclusion.

As of December 31, 2023, our Board of Directors includes 12 members, 11 of whom are independent members, 25 percent of whom are women, and 8.33 percent of whom are from an underrepresented race or ethnicity.

As part of the director selection and nominating process, the Governance and Sustainability Committee annually assesses the Board’s diversity in areas such as expertise, geography, gender, race and ethnicity, and age.

We strive to maintain a board of directors with diverse occupational and personal backgrounds.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business