June 18, 2002 --- Vol. 8, No. 64June 2002

Willams puts Alaska assets up for sale

Williams Cos. is offering all its Alaska properties for sale, including the big North Pole refinery and its 3 percent interest in the trans-Alaska oil pipeline.

But the company says that doesnít mean Williams has lost interest in being part of an Alaska natural gas pipeline. And it also doesnít rule out a potential chemical plant here.

The company announced Tuesday afternoon that it plans to get out of the refining business altogether, selling the Alaska assets and a 190,000-barrel-a-day Memphis refinery that serves the nationís other big air cargo hub.

"We are in the midst of a refocusing effort and the refineries donít fit in with our strategic plan," Mark Wilson, vice president for corporate development for Williams in Tulsa, told PNA in an interview.

"It also tends to help our balance sheet restructuring efforts."

The sales are expected to yield more than $1 billion and be completed by the end of the year. Wilson wouldnít say what percentage of that total Williams expected to get from its Alaska assets.

In addition to the refinery and pipeline stake, Williams owns 29 Alaska convenience stores. It also has a 700,000-barrel terminal in Anchorage and a 20,000 barrel jet fuel terminal at the Fairbanks airport, as well as a fleet of railroad tank cars.

The Alaska operations are profitable, and there are no big capital expenditures needed in the near future, Wilson said. The North Pole refinery has a capacity of 220,000 barrels daily, about 60 percent of it being turned into jet fuel.

While the company is exiting the Alaska market as it stands now, Williams may be back as part of a consortium that could operate a gas pipeline from the North Slope, and perhaps to run a petrochemical plant.

"This doesnít affect our interest in the gas pipeline," Wilson said.

The gas line opportunity is at least eight years away, and "by the time it will be built, we hope to have a much stronger balance sheet," said Michael Cathey, director of business development for Williams Gas Pipeline. "The producers are not envisioning this as a 2008 or 2009 project as we had expected."

Williams also has been looking at building a petrochemical plant in Canada. Cathey says. Under the right conditions, it might build both. "Our initial screening showed both are feasible," he said.

Williamsí stock price slid this year after the company came under pressure from two different directions. The Tulsa-based company guaranteed about $2 billion in loans for a former subsidiary spun off as Williams Communications. That company went into bankruptcy protection. In addition, Williams has been very active in energy trading activities, including California power sales. In the wake of Enron, those operations have worried investors.

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