UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2010

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 001-33917

Williams Pipeline Partners L.P.

Delaware		26-0834035
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)
One Williams Center, Tulsa, Oklahoma		74172-0172
(Address of principal executive offices)		(Zip Code)

(918) 573-2000
(Registrant’s telephone number, including area code)

NO CHANGE
(Former name, former address and former fiscal year, if changed since last report)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer þ		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     The registrant had 22,607,430 common units and 10,957,900 subordinated units outstanding as of July 26, 2010.

 

 

WILLIAMS PIPELINE PARTNERS L.P.

FORM 10-Q

TABLE OF CONTENTS

		Page
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Income — Three and Six Months Ended June 30, 2010 and 2009			5
Consolidated Balance Sheets — June 30, 2010 and December 31, 2009			6
Consolidated Statements of Cash Flows — Six Months Ended June 30, 2010 and 2009			7
Consolidated Statement of Partners’ Capital from January 1, 2010 to June 30, 2010			8
Notes to Consolidated Financial Statements			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			13
Item 3. Quantitative and Qualitative Disclosures About Market Risk			22
Item 4. Controls and Procedures			22
Part II. Other Information
Item 1. Legal Proceedings			23
Item 1A. Risk Factors			23
Item 6. Exhibits			23
EX-10.1
EX-31.1
EX-31.2
EX-32

FORWARD-LOOKING STATEMENTS

     Certain matters contained in this report include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to anticipated financial performance, management’s plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions and other matters. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995.

     All statements, other than statements of historical facts, included in this report that address activities, events or developments that we expect, believe or anticipate will exist or may occur in the future, are forward-looking statements. Forward-looking statements can be identified by various forms of words such as “anticipates,” “believes,” “seeks,” “could,” “may,” “should,” “continues,” “estimates,” “expects,” “forecasts,” “intends,” “might,” “goals,” “objectives,” “targets,” “planned,” “potential,” “projects,” “scheduled,” “will” or other similar expressions. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to management and include, among others, statements regarding:

	•		Amounts and nature of future capital expenditures;
	•		Expansion and growth of our business and operations;
	•		Financial condition and liquidity;
	•		Business strategy;
	•		Cash flow from operations or results of operations;

     Forward-looking statements are based on numerous assumptions, uncertainties and risks that could cause future events or results to be materially different from those stated or implied in this report. Limited partner units are inherently different from the capital stock of a corporation, although many of the business risks to which we are subject are similar to those that would be faced by a corporation engaged in a similar business. You should carefully consider the risk factors discussed below in addition to the other information in this report. If any of the following risks were actually to occur, our business, results of operations and financial condition could be materially adversely affected. In that case, we might not be able to pay distributions on our common units, the trading price of our common units could decline and unitholders could lose all or part of their investment. Many of the factors that will determine these results are beyond our ability to control or predict. Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include, among others, the following:

	•		Whether we have sufficient cash from operations to enable us to maintain current levels of cash distributions or to pay the minimum quarterly distribution following establishment of cash reserves and payment of fees and expenses, including payments to our general partner;
	•		Availability of supplies (including the uncertainties inherent in assessing and estimating future natural gas reserves), market demand, volatility of prices, and the availability and cost of capital;
	•		Inflation, interest rates, and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on Northwest’s customers and suppliers);
	•		The strength and financial resources of our and Northwest’s competitors;
	•		Development of alternative energy sources;
	•		The impact of operational and development hazards;
	•		Costs of, changes in, or the results of laws, government regulations (including proposed climate change legislation), environmental liabilities, litigation and rate proceedings;
	•		Northwest’s allocated costs for defined benefit pension plans and other postretirement benefit plans sponsored by its affiliates;
	•		Changes in maintenance and construction costs;
	•		Changes in the current geopolitical situation;
	•		Northwest’s exposure to the credit risk of its customers;
	•		Risks related to strategy and financing, including restrictions stemming from Northwest’s debt agreements, future changes in Northwest’s credit ratings, and the availability and cost of credit;
	•		Risks associated with future weather conditions;
	•		Acts of terrorism; and
	•		Additional risks described in our filings with the Securities and Exchange Commission (“SEC”).

     Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement, we caution investors not to unduly rely on our forward-looking statements. We disclaim any obligations to and do

not intend to update the above list or to announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments.

     In addition to causing our actual results to differ, the factors listed above and referred to below may cause our intentions to change from those statements of intention set forth in this report. Such changes in our intentions may also cause our results to differ. We may change our intentions, at any time and without notice, based upon changes in such factors, our assumptions, or otherwise.

     Because forward-looking statements involve risks and uncertainties, we caution that there are important factors, in addition to those listed above, that may cause actual results to differ materially from those contained in the forward-looking statements. For a detailed discussion of those factors, see Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2009.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

WILLIAMS PIPELINE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
		(Thousands of dollars, except per-unit amounts)
General and administrative expense		$	1,140			$	737			$	2,470			$	1,390
Other expense			1,200				—				1,200				—
Equity earnings from investment in Northwest Pipeline GP			12,032				12,307				25,291				26,625
Interest expense — affiliate			—				(13	)			(3	)			(25	)
Interest income			2				3				3				5
Net income		$	9,694			$	11,560			$	21,621			$	25,215
Allocation of net income used for earnings per unit calculation:
Net income		$	9,694			$	11,560			$	21,621			$	25,215
Allocation of net loss to general partner			(28	)			(135	)			(9	)			(225	)
Allocation of net income to limited partners		$	9,722			$	11,695			$	21,630			$	25,440
Basic and diluted net income per limited partner unit:
Common units		$	0.29			$	0.35			$	0.64			$	0.76
Subordinated units		$	0.29			$	0.35			$	0.64			$	0.76
Weighted average number of units outstanding:
Common units			22,607,430				22,607,430				22,607,430				22,607,430
Subordinated units			10,957,900				10,957,900				10,957,900				10,957,900

See accompanying notes to consolidated financial statements.

WILLIAMS PIPELINE PARTNERS L.P.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

		June 30,				December 31,
		2010				2009
		(Thousands of dollars)
ASSETS
Current assets:
Cash and cash equivalents		$	9,163			$	8,114
Accounts receivable — affiliate			249				—
Prepaid expense			491				193
Total current assets			9,903				8,307
Investment in Northwest Pipeline GP			440,541				441,608
Total assets		$	450,444			$	449,915
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accounts payable:
Trade		$	1,662			$	419
Affiliate			297				124
Total current liabilities			1,959				543
Contingent liabilities (Note 2)
Partners’ capital			448,485				449,372
Total liabilities and partners’ capital		$	450,444			$	449,915

See accompanying notes to consolidated financial statements.

WILLIAMS PIPELINE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

		Six Months Ended
		June 30,
		2010				2009
		(Thousands of dollars)
OPERATING ACTIVITIES:
Net income		$	21,621			$	25,215
Adjustments to reconcile to cash provided by operations:
Equity earnings from investment in Northwest Pipeline GP			(25,291	)			(26,625	)
Distributions related to equity earnings from investment in Northwest Pipeline GP			26,347				22,750
Cash provided (used) by changes in assets and liabilities:
Accounts receivable			—				(90	)
Other current assets			(298	)			43
Accounts payable			1,416				(561	)
Other			—				12
Net cash provided by operating activities			23,795				20,744
INVESTING ACTIVITIES:
Other			—				—
Net cash provided (used) by investing activities			—				—
FINANCING ACTIVITIES:
Distributions paid			(22,993	)			(22,091	)
Contributions pursuant to the omnibus agreement			247				744
Net cash used by financing activities			(22,746	)			(21,347	)
Increase (decrease) in cash and cash equivalents			1,049				(603	)
Cash and cash equivalents at beginning of period			8,114				7,760
Cash and cash equivalents at end of period		$	9,163			$	7,157

See accompanying notes to consolidated financial statements.

WILLIAMS PIPELINE PARTNERS L.P.

CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL

(Unaudited)

														Accumulated
														Other				Total
		Limited Partner								General				Comprehensive				Partners’
		Common				Subordinated				Partner				Loss				Capital
		(Thousands of dollars)
Balance — January 1, 2010		$	296,932			$	143,513			$	8,969			$	(42	)		$	449,372
Net income			14,569				7,061				(9	)			—				21,621
Other comprehensive income:
Amortization of cash flow hedge			—				—				—				(11	)			(11	)
Total other comprehensive income																			(11	)
Cash distributions			(15,147	)			(7,342	)			(504	)			—				(22,993	)
Contributions pursuant to the omnibus agreement			—				—				496				—				496
Balance — June 30, 2010		$	296,354			$	143,232			$	8,952			$	(53	)		$	448,485

See accompanying notes to consolidated financial statements.

WILLIAMS PIPELINE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Organization and Basis of Presentation

     Unless the context clearly indicates otherwise, references in this report to “we,” “our,” “us” or like terms refer to Williams Pipeline Partners L.P. (“Partnership”), its subsidiaries and the operations of Northwest Pipeline GP (“Northwest”), in which we own a 35 percent interest. When we refer to Northwest by name, we are referring exclusively to Northwest Pipeline GP and its consolidated affiliate, Northwest Pipeline Services LLC.

     We are a Delaware limited partnership formed on August 31, 2007 to own and operate natural gas transportation and storage assets, including a non-controlling ownership interest in Northwest. On January 24, 2008, we completed our initial public offering (“IPO”) of common units. The 35 percent of Northwest owned by us was owned by The Williams Companies, Inc. (“Williams”) prior to the IPO of our common units in January 2008.

     On February 17, 2010, Williams completed a strategic restructuring in which it contributed certain of its midstream and pipeline assets, including its 45.7 percent limited partner interest in us, its 100 percent ownership interest in our general partner, and its 65 percent interest in Northwest to Williams Partners L.P. (“Williams Partners”), an affiliate of Williams and of us, in exchange for cash and units in Williams Partners (the “Dropdown”). As part of the Dropdown, Williams Partners stated its intention to commence an exchange offer for any and all of our outstanding common units not held by Williams Partners or its affiliates at a future date and at an exchange ratio of 0.7584 units of Williams Partners for each of our units, and later indicated that it might propose a merger to our holders also at the previously stated exchange ratio.

     On May 24, 2010, after lengthy negotiations between Williams Partners and a committee consisting of the three directors on the Board of Directors of our general partner who meet the independence requirements established in our partnership agreement, a merger agreement (the “Merger Agreement”) providing for the merger of the Partnership into Williams Partners (the “Merger”) was executed. The Merger and the Merger Agreement are described in detail in the Registration Statement on Form S-4 initially filed by Williams Partners on June 9, 2010 and in our and Williams Partners’ joint proxy statement/prospectus dated July 15, 2010 that is being provided to holders of record of our units at the close of business on July 15, 2010, who are the holders of our units who will be entitled to vote on the Merger at the special meeting of our unitholders scheduled for August 31, 2010. If the Merger is approved at that meeting, it is anticipated that the Merger will be consummated shortly thereafter and all of our units not held by Williams or its corporate affiliates will be exchanged for units of Williams Partners at the exchange ratio set forth above.

     As of June 30, 2010, Williams Partners, through its subsidiary, Williams Pipeline GP LLC, owns a 2 percent general partner interest and a 45.7 percent limited partner interest in us.

     As discussed in our 2009 Annual Report on Form 10-K, on January 20, 2010, we concluded that our financial statements for the year ended December 31, 2008 should be restated due to the manner in which Northwest had presented and recognized pension and postretirement obligations in certain benefit plans for which Williams is the plan sponsor. We concluded that the impact of the error is not material to any of the three quarterly periods of 2009.

     The accompanying interim consolidated financial statements do not include all the notes in our annual financial statements and, therefore, should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K, filed February 23, 2010, for the year ended December 31, 2009. The accompanying consolidated financial statements include all normal recurring adjustments that, in the opinion of management, are necessary to present fairly our financial position at June 30, 2010, results of operations for the three and six months ended June 30, 2010 and 2009, and cash flows for the six months ended June 30, 2010 and 2009. All intercompany transactions have been eliminated.

     The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

WILLIAMS PIPELINE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 2. Contingent Liabilities

     On May 25, 2010, the Booth Family Trust filed a purported class action complaint in Tulsa County District Court against the Partnership, Williams, Williams Partners, Williams Pipeline GP, LLC and its individual directors. The plaintiff asserts that the individuals breached their fiduciary duties in connection with the Partnership’s entry into the Merger Agreement and that the entities aided and abetted these alleged breaches of fiduciary duties. All of the parties against whom the lawsuit was filed believe that the lawsuit is without merit, but to avoid any risk of delaying the Merger, have agreed in principle to settle the lawsuit on the basis that certain additional disclosures would be included in the joint proxy statement/prospectus. On July 9, 2010, all parties to the lawsuit entered into a Memorandum of Understanding outlining the terms upon which this lawsuit would be settled subject to court approval. There can be no assurance that additional claims will not be made or additional lawsuits filed, the substance of which may be similar to the allegations described above or that otherwise might arise from, or in connection with, the Merger Agreement and the transactions it contemplates; however, if the lawsuit is settled on the basis contemplated by the Memorandum of Understanding, all the defendants will receive general release from the putative class. At June 30, 2010, we have accrued liabilities totaling approximately $1.2 million related to the settlement terms, including accrued legal fees, specified in the Memorandum of Understanding.

Note 3. Allocation of Net Income and Distributions

     The allocation of net income between our general partner and limited partners, as reflected in the Consolidated Statement of Partners’ Capital, for the three and six months ended June 30, 2010 and 2009 is as follows:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
		(Thousands of dollars, except per-unit amounts)
Allocation to general partner:
Net income		$	9,694			$	11,560			$	21,621			$	25,215
Charges direct to general partner:
Reimbursable general administrative costs			249				374				496				744
Income subject to 2% allocation of general partner interest			9,943				11,934				22,117				25,959
General partner’s share of net income			2.0	%			2.0	%			2.0	%			2.0	%
General partner’s allocated share of net income before items directly allocable to general partner interest			199				239				442				519
Incentive distributions paid to general partner			22				—				45				—
Direct charges to general partner			(249	)			(374	)			(496	)			(744	)
Net loss allocated to general partner		$	(28	)		$	(135	)		$	(9	)		$	(225	)
Net income		$	9,694			$	11,560			$	21,621			$	25,215
Net loss allocated to general partner			(28	)			(135	)			(9	)			(225	)
Net income allocated to limited partners		$	9,722			$	11,695			$	21,630			$	25,440

     Common and subordinated unitholders have always shared equally, on a per-unit basis, in the net income allocated to limited partners.

WILLIAMS PIPELINE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

     We have paid or have authorized payment of the following post-IPO cash distributions during 2008, 2009 and 2010 (in thousands, except per-unit amounts):

														General Partner
																		Incentive
		Per Unit				Common				Subordinated								Distribution				Total Cash
Payment Date		Distribution				Units				Units				2%				Rights				Distribution
5/15/2008		$	0.2242			$	5,068			$	2,457			$	154			$	—			$	7,679
8/14/2008			0.3100				7,008				3,397				212				—				10,617
11/14/2008			0.3150				7,121				3,452				216				—				10,789
2/13/2009			0.3200				7,234				3,507				219				—				10,960
5/15/2009			0.3250				7,347				3,561				223				—				11,131
8/14/2009			0.3300				7,461				3,616				226				—				11,303
11/13/2009			0.3350				7,574				3,671				230				22				11,497
02/12/2010			0.3350				7,574				3,671				230				22				11,497
05/14/2010			0.3350				7,574				3,671				230				22				11,497
08/13/2010(a)			0.3350				7,574				3,671				230				22				11,497

Note 4. Related Party Transactions

     During the six months ended June 30, 2010, we received distributions totaling $26.3 million from Northwest. Of this amount, $13.7 million represents a distribution from Northwest due to the settlement of its outstanding advances to Williams as of January 31, 2010. We made distributions to Williams of $11.0 million, as declared by the board of directors of our general partner, during the six months ended June 30, 2010.

     Our general partner gives us a credit for general and administrative expenses under the terms of an omnibus agreement. The annual amounts of those credits are as follows: $1.0 million in 2010 and $0.5 million in 2011. At June 30, 2010, $0.5 million is reflected as a capital contribution in our financial statements.

Note 5. Comprehensive Income

     Comprehensive income is as follows:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2010				2009*				2010				2009*
		(Thousands of dollars)
Net income		$	9,694			$	11,560			$	21,621			$	25,215
Amortization of cash flow hedge			(6	)			(5	)			(11	)			(11	)
Total comprehensive income		$	9,688			$	11,555			$	21,610			$	25,204

WILLIAMS PIPELINE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 6. Equity Investments

     Northwest is accounted for using the equity method of accounting. As such, our interest in Northwest’s net operating results is reflected as equity earnings in our Consolidated Statements of Income. The summarized results of operations for 100 percent of Northwest are presented below:

Northwest

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
		(Thousands of dollars)
Revenues		$	102,578			$	107,756			$	208,688			$	219,304
Operating expenses			57,159				60,743				112,978				119,139
Other income, net			438				449				100				640
Interest charges			11,441				12,300				23,511				24,735
Income taxes			38				—				38				—
Net income		$	34,378			$	35,162			$	72,261			$	76,070

Note 7. Disclosures About the Fair Value of Financial Instruments

     The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and cash equivalents — The carrying amounts of these items approximate their fair value.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

     We are a growth-oriented Delaware limited partnership formed by Williams to own and operate natural gas transportation and storage assets. Effective January 24, 2008, we own a 35 percent general partnership interest in Northwest, a subsidiary of Williams that owns an approximate 3,900-mile, bi-directional, interstate natural gas pipeline system that extends from the San Juan Basin in New Mexico through the Rocky Mountains and to the Northwestern United States. Northwest also has working natural gas storage capacity of approximately 13.0 billion cubic feet (“Bcf”). The remaining 65 percent general partnership interest in Northwest is owned by a subsidiary of Williams.

     Our general partnership interest in Northwest is our only significant asset. As a result, we are dependent on Northwest for substantially all of our cash available for distribution, and the management’s discussion and analysis of financial condition and results of operations contained herein is primarily focused on Northwest.

Recent Events

     On February 17, 2010, Williams completed a strategic restructuring in which it contributed certain of its midstream and pipeline assets, including its 45.7 percent limited partner interest in us, its 100 percent ownership interest in our general partner, and its 65 percent interest in Northwest to Williams Partners, an affiliate of Williams and of us, in exchange for cash and units in Williams Partners (the “Dropdown”). As part of the Dropdown, Williams Partners stated its intention to commence an exchange offer for any and all of our outstanding common units not held by Williams Partners or its affiliates at a future date and at an exchange ratio of 0.7584 units of Williams Partners for each of our units, and later indicated that it might propose a merger to our holders also at the previously stated exchange ratio.

     On May 24, 2010, after lengthy negotiations between Williams Partners and a committee consisting of the three directors on the Board of Directors of our general partner who meet the independence requirements established in our partnership agreement, a merger agreement (the “Merger Agreement”) providing for the merger of the Partnership into Williams Partners (the “Merger”) was executed. The Merger and the Merger Agreement are described in detail in the Registration Statement on Form S-4 initially filed by Williams Partners on June 9, 2010 and in our and Williams Partners’ joint proxy statement/prospectus dated July 15, 2010 that is being provided to holders of record of our units at the close of business on July 15, 2010, who are the holders of our units who will be entitled to vote on the Merger at the special meeting of our unitholders scheduled for August 31, 2010. If the Merger is approved at that meeting, it is anticipated that the Merger will be consummated shortly thereafter and all of our units not held by Williams or its corporate affiliates will be exchanged for units of Williams Partners at the exchange ratio set forth above.

     On May 25, 2010, the Booth Family Trust filed a purported class action complaint in Tulsa County District Court against the Partnership, Williams, Williams Partners, Williams Pipeline GP, LLC and its individual directors. The plaintiff asserts that the individuals breached their fiduciary duties in connection with the Partnership’s entry into the Merger Agreement and that the entities aided and abetted these alleged breaches of fiduciary duties. All of the parties against whom the lawsuit was filed believe that the lawsuit is without merit, but to avoid any risk of delaying the Merger, have agreed in principle to settle the lawsuit on the basis that certain additional disclosures would be included in the joint proxy statement/prospectus. On July 9, 2010, all parties to the lawsuit entered into a Memorandum of Understanding outlining the terms upon which this lawsuit would be settled subject to court approval. There can be no assurance that additional claims will not be made or additional lawsuits filed, the substance of which may be similar to the allegations described above or that otherwise might arise from, or in connection with, the Merger Agreement and the transactions it contemplates; however, if the lawsuit is settled on the basis contemplated by the Memorandum of Understanding, all the defendants will receive general release from the putative class. At June 30, 2010, we have accrued liabilities totaling approximately $1.2 million related to the settlement terms, including accrued legal fees, specified in the Memorandum of Understanding.

General

     Unless indicated otherwise, the following discussion and analysis of results of operations and financial condition and liquidity should be read in conjunction with the consolidated financial statements and notes included within Part II, Item 8. Financial Statements and Supplementary Data of our 2009 Annual Report on Form 10-K, the consolidated financial statements and notes contained in Part I, Item 1. Financial Statements of the Northwest Pipeline GP Quarterly Report on Form 10-Q for the quarterly period ending June 30, 2010, and with our consolidated financial statements and notes contained within this document.

Outlook

     Northwest’s strategy to create value focuses on maximizing the contracted capacity on its pipeline by providing high quality, low cost natural gas transportation and storage services to its markets. Changes in commodity prices and volumes transported have little impact on revenues because the majority of Northwest’s revenues are recovered through firm capacity reservation charges. Northwest grows its business primarily through expansion projects that are designed to increase its access to natural gas supplies and to serve the demand growth in its markets.

Northwest’s Capital Projects

          The pipeline projects listed below are significant future pipeline projects for which Northwest has significant customer commitments.

	•		Jackson Prairie Underground Expansion. The Jackson Prairie Storage Project, connected to Northwest’s transmission system near Chehalis, Washington, is operated by Puget Sound Energy and is jointly owned by Puget Sound Energy, Avista Corporation and Northwest. A phased capacity expansion is currently underway and a deliverability expansion was placed in service on November 1, 2008.
			As a one-third owner of Jackson Prairie, in early 2006, Northwest held an open season for a new firm storage service based on its 100 million cubic feet per day share of the planned 2008 deliverability expansion and approximately 1.2 Bcf of its share of the working natural gas storage capacity expansion being developed over approximately a six-year period from 2007 through 2012.
			As a result of the open season, four shippers have executed long-term service agreements for the full amount of incremental storage service offered at contract terms averaging 33 years. The firm service relating to storage capacity rights will be phased-in as the expanded working natural gas capacity is developed. Northwest’s one-third share of the deliverability expansion was placed in service on November 1, 2008 at a cost of approximately $16.0 million. Northwest’s estimated capital cost for the capacity expansion component of the new storage service is $6.1 million, primarily for base natural gas.
	•		Sundance Trail Expansion. In November 2009, Northwest received approval from the Federal Energy Regulatory Commission (“FERC”) to construct approximately 16 miles of 30-inch loop between its existing Green River and Muddy Creek compressor stations in Wyoming as well as an upgrade to its existing Vernal compressor station, with service targeted to commence in November 2010. The total project, currently under construction, is estimated to cost approximately $60 million, including the cost of replacing the existing compression at Vernal, which will enhance the efficiency of Northwest’s system. Northwest executed a transportation service agreement to provide 150 thousand dekatherms per day of firm transportation service from the Greasewood and Meeker Hubs in Colorado for delivery to the Opal Hub in Wyoming. Northwest will collect its maximum system rates under the firm service agreement, and has received approval from the FERC to roll-in the Sundance Trail Expansion costs in any future rate cases.

Williams Pipeline Partners L.P.’s Results of Operations

          Three Months Ended June 30, 2010 Compared to Three Months Ended June 30, 2009

     The Partnership’s net income decreased $1.9 million or 16 percent. The decrease is primarily attributed to the $1.2 million accrual related to the settlement terms of the Memorandum of Understanding combined with higher general and administrative expenses associated with the Dropdown and Merger and lower equity in earnings of Northwest.

          Six Months Ended June 30, 2010 Compared to Six Months Ended June 30, 2009

     The Partnership’s net income decreased $3.6 million or 14 percent. The decrease is due to lower equity in earnings of Northwest, higher general and administrative expenses associated with the Dropdown and Merger and the $1.2 million accrual related to the settlement terms of the Memorandum of Understanding.

Northwest’s Results of Operations

     In the following discussion of the results of Northwest, all amounts represent 100 percent of the operations of Northwest, in which we hold a 35 percent general partnership interest following the completion of our IPO on January 24, 2008. As such, we recognized

equity earnings from investments of $12.0 million and $25.3 million for the three and six months ended June 30, 2010, respectively, compared with the $12.3 million and $26.6 million for the three and six months ended June 30, 2009, respectively.

          Analysis of Financial Results

     This analysis discusses financial results of Northwest’s operations for the three and six-month periods ended June 30, 2010 and 2009. Variances due to changes in natural gas prices and transportation volumes have little impact on revenues, because under Northwest’s rate design methodology, the majority of overall cost of service is recovered through firm capacity reservation charges in Northwest’s transportation rates.

          Three Months Ended June 30, 2010 Compared to Three Months Ended June 30, 2009

     Northwest’s operating revenues decreased $5.2 million, or 5 percent. This decrease is primarily attributed to i) lower Parachute Lateral lease revenues of $2.6 million resulting from the termination of the Parachute Lateral lease on August 1, 2009, ii) lower other revenues of $1.0 million resulting from the absence of sublease income attributed to the restructuring of the Salt Lake City headquarters building lease, iii) lower revenues of $0.9 million resulting from the termination of the Everett Delta Lateral lease on November 9, 2009, and iv) lower firm transportation commodity revenues of $0.7 million due primarily to mild weather in Northwest’s market area and lower off-system deliveries on the southern end of the system. The revenue decreases from the Parachute and Everett Delta laterals as well as the reduction in building sublease revenues is substantially offset by decreases in lease expenses as described below.

     Northwest’s transportation service accounted for 97 percent and 95 percent of its operating revenues for the three-month periods ended June 30, 2010 and 2009, respectively. Natural gas storage service accounted for 3 percent and 4 percent of operating revenues for the three-month periods ended June 30, 2010 and 2009, respectively.

     Operating expenses decreased $3.6 million, or 6 percent, due primarily to i) the termination of the Parachute and Everett Delta leases, resulting in lower lease expense of $3.4 million and ii) the restructuring of the Salt Lake City headquarters building lease resulting in lower building lease expense of $1.2 million. These decreases were partially offset by higher property taxes of $1.0 million primarily attributed to a $1.1 million reduction in 2009 for lower than anticipated mill levies.

          Six Months Ended June 30, 2010 Compared to Six Months Ended June 30, 2009

     Northwest’s operating revenues decreased $10.6 million, or 5 percent. This decrease is primarily attributed to i) lower Parachute Lateral lease revenues of $5.2 million resulting from the termination of the Parachute Lateral lease on August 1, 2009, ii) lower other revenues of $2.0 million resulting from the absence of sublease income attributed to the restructuring of the Salt Lake City headquarters building lease, iii) lower firm transportation commodity revenues of $2.0 million due primarily to mild weather in Northwest’s market area and lower off-system deliveries on the southern end of the system, and iv) lower revenues of $1.4 million resulting from the termination of the Everett Delta Lateral lease on November 9, 2009. The revenue decreases from the Parachute and Everett Delta laterals as well as the reduction in building sublease revenues is substantially offset by decreases in lease expenses as described below.

     Northwest’s transportation service accounted for 97 percent and 95 percent of its operating revenues for the six-month periods ended June 30, 2010 and 2009, respectively. Natural gas storage service accounted for 3 percent and 4 percent of operating revenues for the six-month periods ended June 30, 2010 and 2009, respectively.

     Operating expenses decreased $6.2 million, or 5 percent, due primarily to i) the termination of the Parachute and Everett Delta leases, resulting in lower lease expense of $6.4 million and ii) the restructuring of the Salt Lake City headquarters building lease resulting in lower building lease expense of $2.5 million. These decreases were partially offset by higher property taxes of $2.4 million primarily attributed to a $2.6 million reduction in 2009 for lower than anticipated mill levies.

     Operating Statistics

          The following table summarizes volumes and capacity for the periods indicated:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
		(In Trillion British Thermal Units)
Total Throughput(1)			156				173				336				397
Average Daily Transportation Volumes			1.7				1.9				1.9				2.2
Average Daily Reserved Capacity Under Base Firm Contracts, excluding peak capacity			2.8				2.6				2.8				2.6
Average Daily Reserved Capacity Under Short-Term Firm Contracts(2)			0.2				0.5				0.3				0.6

Capital Resources and Liquidity of Northwest

     Northwest’s ability to finance its operations (including the funding of capital expenditures and acquisitions), to meet its debt obligations and to refinance indebtedness depends on its ability to generate future cash flows and to borrow funds. Northwest’s ability to generate cash is subject to a number of factors, some of which are beyond its control, including the impact of regulators’ decisions on the rates it is able to establish for its transportation and storage services.

     On or before the end of the calendar month following each quarter, available cash is distributed to Northwest’s partners as required by its general partnership agreement. Available cash is generally defined for Northwest as the sum of all cash and cash equivalents on hand at the end of the quarter, plus cash on hand from working capital borrowings made subsequent to the end of that quarter (as determined by Northwest’s management committee), less cash reserves established by Northwest’s management committee as necessary or appropriate for the conduct of Northwest’s business and to comply with any applicable law or agreements. In January 2010, for the three-month period ended December 31, 2009, Northwest distributed $36.0 million of available cash to its partners. In July 2010, Northwest declared equity distributions of $39.5 million to its partners to be paid on July 30, 2010.

     In connection with the Dropdown, Northwest’s participation in the Williams’ cash management program was terminated. As a result of the Dropdown, Northwest became a participant in Williams Partners’ cash management program. In February 2010, Northwest’s management committee authorized a cash distribution of $39.3 million, which included the amount of its outstanding advances with Williams as of January 31, 2010. As of June 30, 2010, cash advances to Williams of $38.7 million remain outstanding and will not be available to Northwest as working capital and are therefore reflected as a reduction in Owners’ Equity.

     Northwest funds its capital spending requirements with cash from operating activities, third-party debt and contributions from Northwest’s partners, and when necessary, with borrowings under the New Credit Facility (described in Method of Financing, Credit Agreement).

          Sources (Uses) of Cash

		Six Months Ended
		June 30,
		2010				2009
		(Thousands of dollars)
Net cash provided (used) by:
Operating activities		$	115,035			$	125,838
Financing activities			(74,641	)			(53,594	)
Investing activities			(40,733	)			(72,231	)
Increase (decrease) in cash and cash equivalents		$	(339	)		$	13

          Operating Activities

     Northwest’s net cash provided by operating activities for the six months ended June 30, 2010 decreased $10.8 million from the same period in 2009. This decrease is primarily attributed to changes in working capital and lower cash operating results, partially offset by an increase in changes in noncurrent assets and liabilities.

          Financing Activities

     Cash used in financing activities for the six months ended June 30, 2010 increased $21.0 million from the same period in 2009 due to higher distributions paid to Northwest’s partners and lower contributions from Williams.

          Investing Activities

     Cash used in investing activities for the six months ended June 30, 2010 decreased $31.5 million from the same period in 2009 due primarily to lower capital expenditures and advances to affiliates as well as higher proceeds from sales of property, plant and equipment.

          Method of Financing

          Working Capital

     Working capital is the amount by which current assets exceed current liabilities. Northwest’s working capital requirements will be primarily driven by changes in accounts receivable and accounts payable. These changes are primarily impacted by such factors as credit and the timing of collections from customers and the level of spending for maintenance and expansion activity.

     Changes in the terms of Northwest’s transportation and storage arrangements have a direct impact on Northwest’s generation and use of cash from operations due to their impact on net income, along with the resulting changes in working capital. A material adverse change in operations or available financing may impact Northwest’s ability to fund its requirements for liquidity and capital resources.

          Short-Term Liquidity

     Northwest funds its working capital and capital requirements with cash flows from operating activities, and, if required, borrowings under the New Credit Facility (described below) and return of advances previously made to Williams Partners.

     Northwest invests cash through participation in Williams Partners’ cash management program. At June 30, 2010, the advances due to Northwest by Williams Partners totaled approximately $75.7 million. The advances are represented by demand notes. The interest rate on the Williams Partners demand notes was based upon the overnight investment rate paid on Williams Partners’ excess cash, which was approximately 0.01 percent at June 30, 2010.

          Credit Agreement

     As part of the restructuring, Northwest was removed as a borrower under the $1.5 billion credit facility it shared as co-borrower with Williams and Transcontinental Gas Pipe Line Company, LLC (“Transco”). On February 17, 2010, Northwest entered into a new $1.75 billion three-year senior unsecured revolving credit facility (“New Credit Facility”) with Williams Partners and Transco, as co-borrowers, and Citibank, N.A., as administrative agent, and certain other lenders named therein. The full amount of the New Credit

Facility is available to Williams Partners, and may, under certain conditions, be increased by up to an additional $250 million. Northwest may borrow up to $400 million under the New Credit Facility to the extent not otherwise utilized by Williams Partners and Transco. Interest on borrowings under the New Credit Facility is payable at rates per annum equal to, at the option of the borrower: (1) a fluctuating base rate equal to Citibank, N.A.’s adjusted base rate plus an applicable margin, or (2) a periodic fixed rate equal to the London Interbank Offered Rate (“LIBOR”) plus an applicable margin. The adjusted base rate will be the highest of (i) the federal funds rate plus 0.5 percent, (ii) Citibank, N.A.’s publicly announced base rate, and (iii) one month LIBOR plus 1.0 percent. Williams Partners pays a commitment fee (currently 0.5 percent) based on the unused portion of the New Credit Facility. The applicable margin and the commitment fee are based on the borrower’s senior unsecured long-term debt ratings.

     The New Credit Facility contains various covenants that limit, among other things, a borrower’s and its respective subsidiaries’ ability to incur indebtedness, grant certain liens supporting indebtedness, merge or consolidate, sell all or substantially all of its assets, enter into certain affiliate transactions, make certain distributions during an event of default and allow any material change in the nature of its business.

     Under the New Credit Facility, Williams Partners is required to maintain a ratio of debt to EBITDA (each as defined in the New Credit Facility) of no greater than 5.00 to 1.00 for itself and its consolidated subsidiaries. The debt to EBITDA ratio is measured on a rolling four-quarter basis. For Northwest, the ratio of debt to capitalization (defined as net worth plus debt) is not permitted to be greater than 55 percent. Each of the above ratios is tested at the end of each fiscal quarter (with the first full year measured on an annualized basis). At June 30, 2010, Northwest is in compliance with this covenant.

     The New Credit Facility includes customary events of default. If an event of default with respect to a borrower occurs under the New Credit Facility, the lenders will be able to terminate the commitments for all borrowers and accelerate the maturity of the loans of the defaulting borrower under the New Credit Facility and exercise other rights and remedies.

     As of June 30, 2010, there were no letters of credit issued by the participating institutions under the New Credit Facility, and no revolving credit loans were outstanding.

 Capital Requirements

     The transmission and storage business can be capital intensive, requiring significant investment to maintain and upgrade existing facilities and construct new facilities.

     Northwest categorizes its capital expenditures as either maintenance capital expenditures or expansion capital expenditures. Maintenance capital expenditures are those expenditures required to maintain the existing operating capacity and service capability of Northwest’s assets, including replacement of system components and equipment that are worn, obsolete, completing their useful life, or necessary to remain in compliance with environmental laws and regulations. Expansion capital expenditures improve the service capability of the existing assets, extend useful lives, increase transmission or storage capacities from existing levels, reduce costs or enhance revenues.

     Northwest anticipates 2010 capital expenditures will be between $120 million and $140 million which includes $60 million to $80 million for maintenance capital and $95 million to $115 million considered nondiscretionary due to legal, regulatory and/or contractual requirements. Northwest’s property, plant and equipment additions were $30.2 million ($21.7 million for maintenance and $8.5 million for expansion) and $47.8 million ($18.4 million for maintenance and $29.4 million for expansion) for the six months ended June 30, 2010 and 2009, respectively.

 Credit Ratings

     During the second quarter of 2010, the credit ratings on Northwest’s senior unsecured long-term debt remained unchanged with investment grade ratings from all three agencies, as shown below:

Moody’s Investors Service		Baa2
Standard and Poor’s		BBB-
Fitch Ratings		BBB

     At June 30, 2010, Northwest’s credit rating outlook is “stable” from Moody’s Investors Service and Fitch Ratings and “positive” from Standard and Poor’s.

     With respect to Moody’s, a rating of “Baa” or above indicates an investment grade rating. A rating below “Baa” is considered to have speculative elements. A “Ba” rating indicates an obligation that is judged to have speculative elements and is subject to substantial credit risk. The “1”, “2” and “3” modifiers show the relative standing within a major category. A “1” indicates that an obligation ranks in the higher end of the broad rating category, “2” indicates a mid-range ranking, and “3” indicates a ranking at the lower end of the category.

     With respect to Standard and Poor’s, a rating of “BBB” or above indicates an investment grade rating. A rating below “BBB” indicates that the security has significant speculative characteristics. A “BB” rating indicates that Standard and Poor’s believes the issuer has the capacity to meet its financial commitment on the obligation, but adverse business conditions could lead to insufficient ability to meet financial commitments. Standard and Poor’s may modify its ratings with a “+” or a “-” sign to show the obligor’s relative standing within a major rating category.

     With respect to Fitch, a rating of “BBB” or above indicates an investment grade rating. A rating below “BBB” is considered speculative grade. A “BB” rating from Fitch indicates that there is a possibility of credit risk developing, particularly as the result of adverse economic change over time; however, business or financial alternatives may be available to allow financial commitments to be met. Fitch may add a “+” or a “-” sign to show the obligor’s relative standing within a major rating category.

     Credit rating agencies perform independent analyses when assigning credit ratings. No assurance can be given that the credit rating agencies will continue to assign Northwest investment grade ratings even if they meet or exceed their current criteria for investment grade ratios.

 Other

 Off-Balance Sheet Arrangements

     Neither we nor Northwest have any guarantees of off-balance sheet debt to third parties and maintain no debt obligations that contain provisions requiring accelerated payment of the related obligations in the event of specified levels of declines in Williams’, Williams Partners’ or Northwest’s credit ratings.

 Impact of Inflation

     Northwest has generally experienced increased costs in recent years due to the effect of inflation on the cost of labor, benefits, materials and supplies, and property, plant and equipment. A portion of the increased labor and materials and supplies costs can directly affect income through increased operating and maintenance costs. The cumulative impact of inflation over a number of years has resulted in increased costs for current replacement of productive facilities. The majority of the costs related to Northwest’s property, plant and equipment and materials and supplies is subject to rate-making treatment, and under current FERC practices, recovery is limited to historical costs. While amounts in excess of historical cost are not recoverable under current FERC practices, Northwest believes it may be allowed to recover and earn a return based on the increased actual costs incurred when existing facilities are replaced. However, cost-based regulation along with competition and other market factors may limit Northwest’s ability to price services or products to ensure recovery of inflation’s effect on costs.

 Environmental Matters

     Northwest is subject to the National Environmental Policy Act and other federal and state legislation regulating the environmental aspects of its business. Except as discussed below, Northwest’s management believes that it is in substantial compliance with existing environmental requirements. Environmental expenditures are expensed or capitalized depending on their future economic benefit and potential for rate recovery. Northwest believes that, with respect to any expenditures required to meet applicable standards and regulations, the FERC would grant the requisite rate relief so that substantially all of such expenditures would be permitted to be recovered through rates. Northwest believes that compliance with applicable environmental requirements is not likely to have a material effect upon its financial position or results of operations.

     Beginning in the mid-1980s, Northwest evaluated many of its facilities for the presence of toxic and hazardous substances to determine to what extent, if any, remediation might be necessary. Northwest identified polychlorinated biphenyl (“PCB”) contamination in air compressor systems, soils and related properties at certain compressor station sites. Similarly, Northwest identified hydrocarbon impacts at these facilities due to the former use of earthen pits and mercury contamination at certain natural gas

metering sites. The PCBs were remediated pursuant to a Consent Decree with the U.S. Environmental Protection Agency (“EPA”) in the late 1980s, and Northwest conducted a voluntary clean-up of the hydrocarbon and mercury impacts in the early 1990s. In 2005, the Washington Department of Ecology required Northwest to re-evaluate its previous mercury clean-ups in Washington. Currently, Northwest is conducting assessment and remediation activities for mercury and other constituents to bring the sites up to Washington’s current environmental standards. At June 30, 2010, Northwest had accrued liabilities totaling approximately $7.4 million for these costs which are expected to be incurred through 2015. Northwest is conducting environmental assessments and implementing a variety of remedial measures that may result in increases or decreases in the total estimated costs.

     In March 2008, the EPA promulgated a new, lower National Ambient Air Quality Standard (“NAAQS”) for ground-level ozone. Within two years, the EPA was expected to designate new eight-hour ozone non-attainment areas. However, in September 2009, the EPA announced it would reconsider the 2008 NAAQS for ground-level ozone to ensure that the standards were clearly grounded in science and were protective of both public health and the environment. As a result, the EPA delayed designation of new eight-hour ozone non-attainment areas under the 2008 standards until the reconsideration is complete. In January 2010, the EPA proposed to further reduce the ground-level ozone NAAQS from the March 2008 levels. The EPA currently anticipates finalization of the new ground-level ozone standard in August 2010 and anticipates designation of new eight-hour ozone non-attainment areas under the new August 2010 ozone NAAQS standards in July 2011. Designation of new eight-hour ozone non-attainment areas are expected to result in additional federal and state regulatory actions that will likely impact Northwest’s operations and increase the cost of additions to property, plant and equipment.

     Additionally, in August 2010, the EPA is expected to promulgate National Emission Standards for hazardous air pollutants (“NESHAP”) regulations that will impact Northwest’s operations. The emission control additions required to comply with the pending hazardous air pollutant regulations are estimated to include costs in the range of $6 million to $9 million through 2013, the expected compliance date.

     Furthermore, the EPA promulgated the Greenhouse Gas (“GHG”) Mandatory Reporting Rule on October 30, 2009, which requires facilities that emit 25,000 metric tons or more CO₂ equivalent per year from stationary fossil-fuel combustion sources to report GHG emissions to the EPA annually beginning March 31, 2011 for calendar year 2010. Subsequently, the EPA proposed additional reporting requirements on April 12, 2010 to address fugitive/vented GHG emissions from petroleum and natural gas facilities. Final promulgation of the additional reporting requirements is expected by late 2010, with an effective date of January 1, 2011. At such time, facilities that emit 25,000 metric tons or more CO₂ equivalent per year from stationary fossil-fuel combustion and fugitive/vented sources combined will be required to report GHG combustion and fugitive/vented emissions to the EPA annually, beginning March 31, 2012 for calendar year 2011. Compliance with this reporting obligation is estimated to cost $3 million to $5 million over the next four to five years.

     In February 2010, the EPA promulgated a final rule establishing a new one-hour NO₂ National Ambient Air Quality Standard. The effective date of the new NO₂ standard was April 12, 2010. This new standard is subject to numerous challenges in the federal court. Northwest is unable at this time to estimate the cost of additions that may be required to meet this new regulation.

 Safety Matters

     Pipeline Integrity Regulations. Northwest has developed an Integrity Management Plan that it believes meets the United States Department of Transportation Pipeline and Hazardous Materials Safety Administration final rule that was issued pursuant to the requirements of the Pipeline Safety Improvement Act of 2002. In meeting the integrity regulations, Northwest has identified high consequence areas and completed its baseline assessment plan. Northwest is on schedule to complete the required assessments within specified timeframes. Currently, Northwest estimates that the cost to perform required assessments and associated remediation will be primarily capital in nature and range between $80 million and $95 million over the remaining assessment period of 2010 through 2012. Northwest’s management considers the costs associated with compliance with the rule to be prudent costs incurred in the ordinary course of business and, therefore, recoverable through its rates.

 Legal Matters

     Northwest is party to various legal actions arising in the normal course of business. Northwest’s management believes that the disposition of outstanding legal actions will not have a material adverse impact on its future liquidity or financial condition.

 Summary

     Litigation, arbitration, regulatory matters, environmental matters, and safety matters are subject to inherent uncertainties. Were an unfavorable ruling to occur, there exists the possibility of a material adverse impact on the results of operations in the period in which the ruling occurs. Northwest’s management, including internal counsel, currently believes that the ultimate resolution of the foregoing matters, taken as a whole and after consideration of amounts accrued, insurance coverage, recovery from customers or other indemnification arrangements, will not have a material adverse effect on Northwest’s future liquidity or financial position.

 Conclusion

     Although no assurances can be given, Northwest currently believes that the aggregate of cash flows from operating activities, supplemented when necessary, by advances or capital contributions from its partners and/or borrowings under the New Credit Facility, will provide Northwest with sufficient liquidity to meet its capital requirements. Northwest anticipates that it will be able to access public and private debt markets on terms commensurate with its credit ratings to finance its capital requirements, when needed.

Capital Resources and Liquidity of Williams Pipeline Partners L.P.

     Our principal sources of liquidity include cash distributed to us by Northwest. We expect to fund our operating expenses, debt service and cash distributions primarily with distributions from Northwest. As of June 30, 2010, we had cash and cash equivalents of $9.2 million.

     Prior to the completion of the restructuring on February 17, 2010, we were able to invest cash through participation in Williams’ cash management program. Subsequent to the restructuring, we may invest cash through participation in the Williams Partners cash management program. Any advances will be represented by one or more demand obligations. The interest rate on demand notes is based upon the overnight investment rate paid on Williams Partners’ excess cash, which was approximately 0.01 percent at June 30, 2010. No cash has been invested in the Williams or Williams Partners cash management program through June 30, 2010.

 Northwest Distributions

     In January 2010, we received cash distributions of $12.6 million from Northwest. In February 2010, Northwest made a cash distribution of $39.3 million to its partners to settle the outstanding advances to Williams as of January 31, 2010, of which our share was $13.7 million. In July 2010, Northwest declared a cash distribution of $39.5 million to its partners of which our share will be $13.8 million to be paid on July 30, 2010.

 Capital Contributions

     Please see Part I, Item 1. Financial Statements — Notes to Consolidated Financial Statements: Note 4. Related Party Transactions.

 Cash Distributions to Unitholders

     We have paid quarterly distributions to unitholders and our general partner after every quarter since our IPO on January 24, 2008. A quarterly cash distribution of $11.5 million was paid on February 12, 2010, to unitholders of record at the close of business on February 5, 2010. Our last quarterly cash distribution of $11.5 million was paid on May 14, 2010 to unitholders on record at the close of business on May 7, 2010. On July 27, 2010 the board of directors of our general partner declared a cash distribution of $11.5 million to be paid on August 13, 2010, to unitholders of record at the close of business on August 6, 2010.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     For quantitative and qualitative disclosures about market risk, see Part II, Item 7A. Quantitative and Qualitative Disclosures about Market Risk of our Annual Report on Form 10-K for the year ended December 31, 2009. Our exposures to market risk have not changed materially since December 31, 2009.

Item 4. Controls and Procedures

     Our management, including our general partner’s Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) of the Securities Exchange Act) (“Disclosure Controls”) or our internal controls over financial reporting (“Internal Controls”) will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Williams Pipeline Partners L.P. have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. We monitor our Disclosure Controls and Internal Controls and make modifications as necessary; our intent in this regard is that the Disclosure Controls and the Internal Controls will be modified as systems change and conditions warrant.

Evaluation of Disclosure Controls and Procedures

     An evaluation of the effectiveness of the design and operation of our Disclosure Controls was performed as of the end of the period covered by this report. This evaluation was performed under the supervision and with the participation of our management, including our general partner’s Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our management concluded that these Disclosure Controls are effective at a reasonable assurance level.

Second Quarter 2010 Changes in Internal Controls

     There have been no changes during the second quarter of 2010 that have materially affected, or are reasonably likely to materially affect, our Internal Controls.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     The information called for by this item is provided in Part I, Item 1. Financial Statements — Notes to Consolidated Financial Statements: Note 2. Contingent Liabilities.

Item 1A. Risk Factors

     Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2009, includes certain risk factors that could materially affect our business, financial condition or future results. Those Risk Factors have not materially changed.

Item 6. Exhibits

     The following instruments are included as exhibits to this report.

Exhibit
Number		Description
3.1		Certificate of Limited Partnership of Williams Pipeline Partners L.P. (filed on September 12, 2007 as Exhibit 3.1 to our Registration Statement on Form S-1) and incorporated herein by reference.
3.2		First Amended and Restated Agreement of Limited Partnership of Williams Pipeline Partners L.P., dated January 24, 2008 (filed on January 30, 2008 as Exhibit 3.1 to our Form 8-K) and incorporated herein by reference.
3.3		Certificate of Formation of Williams Pipeline GP LLC (filed on September 12, 2007 as Exhibit 3.3 to our Registration Statement on Form S-1) and incorporated herein by reference.
3.4		First Amended and Restated Limited Liability Company Agreement of Williams Pipeline GP LLC, dated January 24, 2008 (filed on January 30, 2008 as Exhibit 3.2 to our Form 8-K) and incorporated herein by reference.
10.1*		Credit Agreement, dated as of February 17, 2010, by and among Williams Partners L.P., Transcontinental Gas Pipe Line Company, LLC, Northwest Pipeline GP, the lenders party thereto and Citibank, N.A., as Administrative Agent.
31.1*		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
31.2*		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
32**		Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Williams Pipeline Partners L.P. (Registrant)
		By:		Williams Pipeline GP LLC,
				its general partner
		By:		/s/ Ted T. Timmermans
				Ted T. Timmermans
				Chief Accounting Officer

July 29, 2010

EXHIBIT INDEX

Exhibit
Number		Description
3.1		Certificate of Limited Partnership of Williams Pipeline Partners L.P. (filed on September 12, 2007 as Exhibit 3.1 to our Registration Statement on Form S-1) and incorporated herein by reference.
3.2		First Amended and Restated Agreement of Limited Partnership of Williams Pipeline Partners L.P., dated January 24, 2008 (filed on January 30, 2008 as Exhibit 3.1 to our Form 8-K) and incorporated herein by reference.
3.3		Certificate of Formation of Williams Pipeline GP LLC (filed on September 12, 2007 as Exhibit 3.3 to our Registration Statement on Form S-1) and incorporated herein by reference.
3.4		First Amended and Restated Limited Liability Company Agreement of Williams Pipeline GP LLC, dated January 24, 2008 (filed on January 30, 2008 as Exhibit 3.2 to our Form 8-K) and incorporated herein by reference.
10.1*		Credit Agreement, dated as of February 17, 2010, by and among Williams Partners L.P., Transcontinental Gas Pipe Line Company, LLC, Northwest Pipeline GP, the lenders party thereto and Citibank, N.A., as Administrative Agent.
31.1*		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
31.2*		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
32**		Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.