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One of America’s largest pipeline companies is set to sue its arch-rival, highlighting a legal dispute that has plagued the construction of America’s energy infrastructure.
Alan Armstrong, chief executive of Williams, told the Financial Times that his company would seek “big dollars” in damages from Energy Transfer – led by prominent Donald Trump donor Kelcy Warren – as it launches a legal battle over allegations of competition distortion. behaviour.
The two pipeline giants have been embroiled in a court battle for months over Energy Transfer’s objections to the development of a $1 billion pipeline to carry natural gas from a Louisiana oil field to the Gulf Coast. Armstrong said Williams is now taking the matter further.
“The next step for us will be to file a claim for damages that are caused by their efforts to stop us,” he said in an interview. “It’s big bucks. . . it’s not an inconsiderable amount of money, that’s for sure.’
Energy Transfer argued in court that Williams did not do enough to ensure the safety of transitions between the pipeline development and its own pipelines.
In a statement to the Financial Times, Energy Transfer said it “will never regret standing up for the safety of its assets and those whose assets we cross, despite CEO Williams’ misleading claims”.
The dispute highlights the pitfalls delaying pipeline construction in the US. It’s a particular problem for natural gas, as demand is rising due to surging exports and growing domestic consumption needed to meet the huge growth in electricity use for artificial intelligence and data storage.
Tensions over the pipelines have risen in recent years amid a proliferation of permitting lawsuits as climate activists seek to slow construction of projects they say will depend on fossil fuels for decades. It is unusual for companies to raise objections of this nature against competing projects.
“Most of the operators we deal with are responsible operators,” Armstrong said. “I think Energy Transfer is way off the mark on this and I think they’ll end up regretting their actions.
Williams’ Louisiana Energy Gateway project is designed to transport 1.8 billion cubic feet per day of natural gas from the Haynesville Shale through Louisiana and Texas to liquefied natural gas terminals on the Gulf Coast. It was due to come online this year, but the company says a clash with Energy Transfer has pushed the launch date back to the second half of 2025.
“Holding things like that — there are consequences,” Armstrong said.
Energy Transfer has also opposed other developers’ pipeline projects, 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 move forward 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 negotiated with, Williams has not provided the critical information we need to adequately assess the impact of the large number of transitions they are seeking,” Energy Transfer said in a statement. “We have to question Williams’ motives in his reluctance to share this information, as this is standard process for requests to cross pipelines.”
Litigation over the projects has caused a sharp decline in U.S. pipeline development, with less than 1 billion cu ft/d of interstate gas capacity added in 2023, the lowest on record compared with 28 billion cu ft, according to the Federal Energy Regulatory Commission. /d added in 2017.
It also caused costs to spiral: The 300-mile Mountain Valley Pipeline in Virginia went online this month after a flurry of legal problems, six years late and at a cost of $7.85 billion, more than double original projections.
However, the vast majority of lawsuits have been brought by environmental activists rather than companies, and Energy Transfer’s actions in Louisiana have angered both industry and politicians.
Louisiana Governor Jeff Landry, in his previous role as attorney general, said the Energy Transfer lawsuit, if successful, risks setting a precedent that “could make many energy products nearly impossible (or at least cheaper) to bring to market.”
Energy Transfer and Williams have been bitter rivals since a $33 billion takeover bid led by Warren collapsed in 2016, sparking years of litigation. In October, the Delaware Supreme Court ruled that Energy Transfer must pay Williams $495 million to back out of the proposed deal.