Williams expects initial operations at the Willow Creek processing plant to boost the volume of marketable liquids recovered from its production in the basin by more than fivefold, compared with current levels.

The Willow Creek plant and its associated pipelines in the Piceance Basin are designed to create value by:

    -- Maximizing the profitability of Williams' current and future natural
       gas production by extracting and marketing higher-value liquids,
       including ethane, propane, butane and natural gasoline.
    -- Providing a platform from which Williams could choose to expand its
       processing capacity to meet future demand growth, supported by
       increases in its own and third parties' natural gas production.
    -- Supporting Williams' need to ensure that its growing natural gas
       production in the Piceance Basin has efficient and effective access to
       markets.

The company's existing Piceance Basin processing plants can recover approximately 4,500 barrels per day of natural gas liquids. The existing processing plants are primarily designed to condition the natural gas to meet quality specifications for pipeline transmission, not to maximize natural gas liquids extraction.

Williams expects the Willow Creek facility will recover an additional 20,000 barrels per day of natural gas liquids from Williams' production at startup. The company expects the plant to be operational in the third quarter of 2009, subject to permitting and regulatory review. The expectation for peak natural gas liquids production at Willow Creek is nearly 30,000 barrels per day.

"The Piceance Basin continues to be Williams' cornerstone for growing our natural gas production," said Steve Malcolm, chairman, president and chief executive officer. "We will create additional revenues from the same gas stream while setting the stage for our midstream business to provide services to producers in the basin."

As designed, the Willow Creek facility will consist of a single-train cryogenic plant located in Rio Blanco County, Colo., approximately 25 miles northwest of Williams' existing facilities in Garfield County.

Initially, more than half of the plant's volumes will come from Williams' production in the Parachute Valley area to the south of the facility. This gas will be transported to the Willow Creek plant via the company's new Northwest Pipeline Parachute Lateral, a 30-inch-diameter pipeline currently under construction.

The remaining volumes for Willow Creek's first train are expected to come from Williams' newest development areas in the northern portion of the Piceance Basin known as the Highlands. Williams expects its Highlands production to grow by 50 percent during 2007 alone.

In a separate announcement Wednesday, a joint venture in which Williams has an interest unveiled plans to construct and operate a 150-mile extension of the Overland Pass Pipeline. The planned pipeline lateral will transport natural gas liquids already being produced by Williams' existing facilities and the Willow Creek plant to Midcontinent markets via the Overland Pass Pipeline.

Williams owns a 1 percent interest in the Overland Pass joint venture, led by ONEOK Partners, L.P.. Williams has an option to increase its Overland Pass ownership to 50 percent and become operator within two years of the pipeline becoming operational. The expected in-service date for the Overland Pass Pipeline is early 2008; the lateral extension to the Willow Creek plant is early 2009.

Over the past two years, Williams has nearly doubled its natural gas production in the Piceance Basin. Williams now produces approximately 600 million cubic feet of natural gas per day in the area -- enough energy to supply more than 2.5 million homes per day.

At year-end 2006, Williams' reserves in the Piceance Basin accounted for 67 percent of the company's 3.7 trillion cubic feet equivalent of total proved domestic reserves.

Williams is operating 25 rigs to develop new production in the Piceance Basin. The fleet includes a new generation of high-efficiency rigs that from a single surface location can develop production from up to 22 wells -- three times more than a conventional rig. This technology also is designed to reduce the surface footprint by up to 75 percent.

"The Willow Creek plant is a natural extension of Williams' long-standing leadership in western Colorado," said Ralph Hill, president of the company's natural gas production business.

"Williams' midstream business brings a proven track record for building and operating highly reliable processing facilities. Williams also has a history of expanding these plants to accommodate future growth, just as we've seen with the recent expansions at our Opal, Wyoming, plant," Hill said.

Earlier this year at Opal, Williams brought into service a new cryogenic processing train that increased processing capacity by 30 percent to nearly 1.5 billion cubic feet of natural gas per day. Overall, Williams has more than doubled its processing capacity at its Opal plant over the last seven years.

"Williams will continue to work closely with local officials, county commissioners, the Bureau of Land Management and the Colorado Department of Public Health and Environment as we submit permit applications and work toward making the plant a vital part of Rio Blanco County," said Alan Armstrong, president of Williams' midstream gathering and processing business.

"We are excited about bringing the benefits of large-scale and highly efficient midstream services to the growing number of producers in this basin," Armstrong said.

Williams, through its subsidiaries, primarily finds, produces, gathers, processes and transports natural gas. The company also manages a wholesale power business. Williams' operations are concentrated in the Pacific Northwest, Rocky Mountains, Gulf Coast, Southern California and Eastern Seaboard.