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Williams Co. will slash its 2016 capital budget by more than $1 billion, the company said Monday, as the Oklahoma pipeline giant prepares to be acquired by Dallas' Energy Transfer Equity.

The 35 percent capital budget cut from last year comes amid the ongoing oil crash and just two weeks after Moody's Investors Service downgraded Williams' credit rating. Williams said it is slicing its capital budget from $3.3 billion down to $2.1 billion for the year.

Williams said it is canceling or delaying multiple projects because of the ongoing slump in oil and gas prices. As producers extract less soil and gas, there's less product for companies like Williams to transport, process or store.

Our strategy remains intact and the underlying fundamentals of our business are strong despite the slower growth rates producers currently face,†said Williams CEO Alan Armstrong in a prepared statement.

Armstrong noted the majority of capital spending will go toward the expansion of its Transco pipeline system running from Texas to New York. Williams also is looking to make about $1 billion in asset sales during the first half of the year.

But the company has generated more news of late because, in September, Dallas-based Energy Transfer announced it reached a $32.9 billion deal to acquire Williams. Both Williams and Energy Transfer have most of their assets in their master-limited partnerships, Williams Partners and Energy Transfer Partners, respectively.

The deal is expected to close in the second quarter of the year, and Williams on Monday again reiterated its focus on seeing the deal finalized. The sale would create the nation's largest energy infrastructure company.

The midstream pipeline industry is somewhat protected from low oil prices because of long-term fee contracts, but the midstream sector is not immune from the whims of Wall Street and many pipeline companies have seen their stock values plummet, including Williams and Energy Transfer.