Williams closed the $5.5 billion acquisition of Momentum Midstream's Haynesville shale pipeline system, connecting Louisiana gas fields directly to hyperscaler data center clusters along the Gulf Coast. The deal closed Friday with $3.8 billion in cash and $1.7 billion in assumed project debt, making it Williams' largest acquisition since the $10.5 billion Access Midstream buy in 2014.
Momentum's assets include 1,200 miles of gathering pipe and 2.1 billion cubic feet per day of processing capacity in the Haynesville, the lowest-cost gas basin in North America at $1.80 per million BTU wellhead breakeven. The pipelines feed three substations built specifically for data center loads: two in northern Louisiana and one in East Texas, all within 40 miles of existing Microsoft and Meta campuses. Williams inherits 12-year firm transportation agreements with 95% take-or-pay clauses, weighted average remaining life of 9.4 years. Momentum built the system between 2021 and 2023 with backing from EnCap Flatrock Midstream and filed for a sale process in October.
The timing reflects a structural shift in power procurement. Hyperscalers are bypassing utility queues entirely, contracting natural gas directly at the wellhead to guarantee 24/7 baseload power for AI training clusters. Microsoft signed a 500 megawatt, 20-year gas supply agreement in August tied to Haynesville production; Meta and Google have similar structures under negotiation, according to filings with the Louisiana Public Service Commission. Williams now controls the physical infrastructure linking those contracts to combustion turbines on-site at data centers, a margin stack the utilities never touched. The company guides $525 million in annual EBITDA from the acquired assets by year three, implying a 10.5x multiple before synergies.
This changes the capex cycle for midstream. Williams' existing backlog includes $4.2 billion in contracted expansions through 2027, almost entirely tied to LNG export terminals and petrochemical plants. The Momentum deal adds a second demand vector with longer contract durations and no exposure to global commodity arbitrage. Data center power is local, firm, and inflation-indexed to PPI rather than Henry Hub. The company's investor deck now splits growth projects into "LNG/Petchem" and "Data Infrastructure," a category that did not exist 18 months ago. Management expects $1.1 billion in incremental expansions serving hyperscaler loads by 2029, separate from the base Momentum purchase.
Watch for competing bids on similar Haynesville systems, particularly from Kinder Morgan and Energy Transfer, both of which have filed preliminary engineering studies with FERC for data center laterals in East Texas. Williams' deal sets a valuation benchmark at $2,600 per horsepower of compression capacity, roughly 30% above recent Permian comps. The next test is whether hyperscalers commit to 15-year or 20-year contracts for the second tranche of campuses planned in Alabama and Georgia; those decisions will shape whether this is a $20 billion buildout cycle or a $60 billion one. Microsoft's Azure expansion budget for 2025 is $80 billion, of which $14 billion is earmarked for energy infrastructure, per the January investor call.
Williams now owns the only vertically integrated gas-to-data-center system in commercial operation in the U.S., with physical molecules moving under contract from Haynesville wells to on-site turbines at three separate hyperscaler campuses. The company's next earnings call is March 4.