Williams Partners L.P. has announced that it completed the sale of all of its membership interest in Williams Olefins L.L.C., which owns an 88.46% undivided ownership interest in the Geismar, Louisiana, olefins plant and associated complex, to NOVA Chemicals for US$2.1 billion in cash, subject to a working capital adjustment.
Additionally, Williams Partners subsidiaries have entered into long-term supply and transportation agreements with NOVA Chemicals to provide feedstock to the Geismar olefins plant via Williams Partners’ ethane pipeline system in the US Gulf Coast. These agreements will secure a meaningful long-term fee-based revenue stream for the partnership.
“Completing this successful transaction represents another important step in our natural gas-focused business strategy to deliver predictable long-term growth as we reduce our commodity-margin exposure,” said Alan Armstrong, chief executive officer of Williams Partners’ general partner. “Around 97% of our gross margins will now come from predictable fee-based sources, including the previously announced new long-term supply and transportation agreements with NOVA. We look forward to supporting NOVA’s strategy in the Gulf Coast with our highly reliable ethane pipeline system as part of this win-win transaction and agreement for both companies.”
Williams Partners plans to use the cash proceeds from the Williams Olefins transaction to pay off its US$850 million term loan and to fund a portion of the capital and investment expenditures that are a part of the partnership’s extensive growth portfolio. The Williams Companies, Inc. expects that for federal tax purposes, any taxable gain generated from the transaction will be sheltered by tax losses carried forward.
Read the article online at: https://www.hydrocarbonengineering.com/petrochemicals/10072017/williams-partners-completes-sale/