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Williams chalks up another sale Big energy company does $1.1 billion deal for pipelines, terminals Petroleum News Houston Staff
Oklahoma-based Williams, in what has become a weekly ritual, announced a big asset sale designed to help keep the debt-heavy energy giant afloat. This time the company is selling its 54.6 percent stake in Williams Energy Partners LP for $1.1 billion in cash and debt.
The buyer, a newly formed entity owned by Madison Dearborn Partners and Carlyle/Riverstone Global Energy and Power Fund, has agreed to pay about $512 million in cash, Williams said April 21.
Williams said the sale also would have the effect of removing $570 million of the partnership’s debt from Williams’ consolidated balance sheet.
The assets include a 6,700-mile refined products pipeline system and 39 related storage terminals, an ammonia pipeline system, five marine terminal facilities and 25 inland terminal facilities.
“Williams has come a long way in a short time,” said Steve Malcolm, Williams’ chairman and chief executive officer.
Indeed.
$2.6 billion in cash Since the first of the year, Williams has sold or agreed to sell assets for more than $2.6 billion in cash and relief of nearly $900 million in debt.
In addition to selling its interest in its master limited partnership, Williams the previous week announced the sale of its 5,800-mile Texas Gas Transmission natural gas pipeline system to New York conglomerate Loews for about $1.05 billion in cash and debt. The week before the Texas Gas deal Williams agreed to sell Lower 48 natural gas exploration and production properties to Fort Worth, Texas, independent XTO Energy for $400 million.
In addition, Williams last month completed the sale of its Memphis, Tenn., refining operations to Premcor for about $455 million, and agreed to sell its power agreement with Jackson Electric Membership Corp. in Georgia to Progress Energy for $188 million. North Pole still for sale Williams has yet to find a buyer for its Alaska North Pole refinery and small interest in the Trans-Alaska Pipeline.
The company’s latest transaction is scheduled to close in May, and Williams said it expects to recognize a pre-tax gain of at least $285 million to $300 million.
“This agreement moves us closer to wrapping up major asset sales and rounding out what Williams will look like in the near future,” Malcolm said, explaining that Williams is “reshaping and resizing” the company to focus on natural gas production, processing and transportation.
Selling Williams’ interest in the master limited partnership “substantially ends” the company’s nearly four decades of participation in the oil segment of the energy industry, Malcolm said.
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