Williams sells more assets, moves closer to $3.7 billion sale goal

Petroleum News Houston staff

Financially troubled energy company Williams is now about two-thirds of the way to its goal of shedding $3.7 billion in assets this year, agreeing to sell 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 April 14 announcement came just a week after Tulsa, Okla.-based Williams said it agreed to sell $400 million worth of U.S. exploration and production properties to Fort Worth, Texas, independent XTO Energy.

Last month Williams 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.

Williams’ Alaska North Pole refinery and small stake in the Trans-Alaska Pipeline are among assets yet to find a buyer.

In its latest transaction, Williams said Loews would pay the company $795 million in cash and assume $250 million of Texas Gas debt. The sale is expected to close within 60 days, Williams said.

“We are quickly and carefully moving forward with our goal of creating a financially strengthened, more focused Williams,” said Steve Malcolm, Williams’ chairman and chief executive officer.

Williams transports about 12 percent of the natural gas consumed in the United States.

Loews, a holding company, is one of the largest diversified financial corporations in the United States. Its subsidiaries include CNA Financial, Lorillard, Diamond Offshore Drilling and Loews Hotels.

The Texas Gas pipeline system, with a capacity of 2.8 billion cubic feet per day, transports natural gas from the Gulf Coast, east Texas and north Louisiana to markets in the South and Midwest.

After the deal closes, Williams’ subsidiaries would own and operate about 14,000 Miles of interstate pipelines, consisting of the Transco and Northwest Pipeline systems. Williams also maintains a 50 percent stake in the 581-mile Gulfstream pipeline.

As a result of the sale, Williams said it expects to take a pre-tax impairment charge to earnings of about $110-to $120 million in the 2003 first quarter.