Chevron (NYSE: CVX) and natural gas pipeline giant Williams (NYSE: WMB) recently signed agreements to support key development projects. The deals will provide Chevron with access to pipeline capacity to transport its natural gas from production wells to market centers. Meanwhile, the contracts will supply Williams with more cash flow to support its 5.7%-yielding dividend.
Here's a look at how the agreements will benefit both energy stocks .
Williams will provide natural gas gathering services to Chevron in the Haynesville basin of Louisiana. The energy behemoth dedicated its 26,000-acre position to Williams, which will build a new gathering system to transport the gas from the wellhead to Williams' Louisiana Energy Gateway (LEG) project. The gas can then move to premium markets via Williams' Transco pipeline. It can also flow on other systems to industrial markets and liquefied natural gas (LNG) facilities along the Gulf Coast.
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Chevron Is Giving This Dividend Stock a Big Boost