Williams sells Alaska holdings to three companies for $265 million
Williams said today that it is selling its Alaska assets to three companies: the North Pole refinery to Flint Hills Resources; a 3.0845 percent share of the trans-Alaska pipeline to Koch Alaska Pipeline; and 26 convenience stores to Holiday Stationstores.
Both Flint Hills Resources and Koch Pipeline Co. are wholly owned subsidiaries of Koch Industries. Koch Alaska Pipeline is a subsidiary of Koch Pipeline Co. Holiday Stationstores is owned by Holiday Cos., a private company founded in Wisconsin in 1928, and is the sole distributor of a low-sulfur gasoline produced by Flint Hills Resources in Minnesota.
Williams said the transactions are expected to close in the first quarter of 2004. They are subject to Hart-Scott-Rodino review and other conditions and approvals, including Flint Hills Resources’ successful completion of a crude oil supply contract with the state of Alaska, which must be approved by the Alaska Legislature. The interest in the trans-Alaska pipeline is subject to preferential purchase rights by the other owners of the pipeline.
Williams said the selling price, approximately $265 million in cash, is subject to closing adjustments for items such as the value of petroleum inventories.
Flint Hills Resources is purchasing the North Pole refinery, two petroleum terminals in Anchorage and Fairbanks, and crude oil and refined products inventories.
In addition to the cash proceeds, Williams said, the transaction eliminates two cash-collateralized letters of credit that Williams has with the state of Alaska, releasing $90.9 million back to the company.
Williams announced its intention to divest the North Pole refinery in June 2002, and since that time has divested its other refining interests in Memphis, Tenn., and Lithuania.
Kenai Kachemak Pipeline holding open season for expansion
Kenai Kachemak Pipeline said today that it is holding “a binding open season for firm transportation service” for shipping natural gas on the proposed pipeline expansion project.
The company said it has been contacted by a potential requesting the expansion and is holding the “to determine the full extent of any interest by potential shippers” in the expansion from the southern end of the exiting system in the Ninilchik unit to Unocal’s Happy Valley exploration pad, part of the Deep Creek unit.
Kenai Kachemak said the primary purpose of the expansion would be to ship natural gas from Happy Valley and would be an extension of about 15 miles.
Agreements are due Dec. 10, and would commit contracting shippers to “a firm transportation service agreement” for at least 14 years. The 14-year commitments will be used to determine sizing of the system, Kenai Kachemak said, and once the expansion is in service, shippers will be able to contract for firm transportation for less than 14 years, or for interruptible transportation service, “to the extent of remaining available capacity.”
The pipeline extension is expected to be in operation in November 2004.