Williams Pipeline Partners L.P.WMZ

Stock Research and Analysis

by Catharina Milostan

Williams Pipelines Partners' initial ownership stake in well-placed Northwest Pipeline is a good start, but troubled financial markets may stall near-term asset drop-downs from the parent company. Longer term, we like the master limited partnership's Read more

Bulls Say

WMZ's initial interest is in the well-positioned Northwest Pipeline with unique gas pipeline access to major cities including Seattle, Portland, and Boise.

Northwest Pipeline has internal growth potential to boost gas transportation to Northwestern U.S. cities from the Rockies and San Juan producing basins.

WMZ's relationship with parent Williams Companies can help it secure funding for acquisitions, including the option to issue shares to the parent.

Williams Companies has a history of selling assets to its MLPs, and it may sell assets to WMZ when financial markets improve.

Pipelines enjoy economic moats, as new pipelines are expensive to build and must satisfy rigorous regulatory requirements for construction approval. Read more

Bears Say

Financial market uncertainty could curtail WMZ's ability to raise funds for growth projects and acquisitions, or slow the potential sale of parent company assets to the MLP.

A weakened economy or competing pipeline could reduce future contracted volumes on Northwest Pipeline when current long-term contracts are renegotiated, reducing equity earnings potential for WMZ.

Investors in WMZ are responsible for their share of the MLP's tax bill, which can increase tax-filing complexity and decrease the net returns investors enjoy from holding partnership units. Read more

Strategy

WMZ's primary business objectives are to generate stable cash flows from interests in gas transportation and storage assets, and over time to increase quarterly cash distributions. Its initial asset Read more

Management

Like many MLPs spun off from a parent, WMZ does not have any employees and is run by the general partner, with the same executives who run the parent, Williams Companies. As Williams Companies owns a 46% limited partner interest and 2% general partner Read more

Profile

Williams Pipeline Partners is a Tulsa, Okla.-based master limited partnership that was formed by Williams Companies to hold interests in natural gas pipelines and storage Read more

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