Williams Partners LP (NYSE: WPZ) has agreed to sell its interest in the Geismar, La., olefins plant and associated complex, to NOVA Chemicals for $2.1 billion in cash.
The deal will give NOVA 100% control of Williams Olefins LLC, owner of an 88.46% interest in the complex, after its expected closing this summer.
It also secures a long-term fee-based revenue stream for the partnership, with Williams Partners subsidiaries enter into long-term supply and transportation agreements with NOVA to provide feedstock to the plant through the partnership’s Bayou Ethane pipeline system.
“The Williams Olefins transaction and these announced new supply and transportation agreements fortify our focus on natural gas market fundamentals, reduce our commodity margin exposure and secure our fee-based Gulf Coast transportation business—all consistent with Williams’ strategy to allocate capital to its core, natural gas-focused business,” said Alan Armstrong, CEO of Williams Partners’ general partner. “When the Williams Olefins transaction closes, we expect to be at 97% fee-based revenues driven largely by natural gas volumes. Today’s announcements further strengthen our financial position to support Williams’ peer-leading, low-risk growth portfolio.”
Williams Partners will use the cash proceeds from the transaction to pay off its $850 million term loan and to fund a portion of the capital and investment expenditures that are a part of the partnership’s growth portfolio. The MLP said it would update its financial guidance at its Analyst Day event on May 11.
Recommended Reading
TotalEnergies Closes $1.4B Acquisition of Malaysia’s SapuraOMV
2024-12-10 - TotalEnergies acquired SapuraOMV’s main assets in blocks SK408 and SK310, both located offshore Sarawak in Malaysia.
TotalEnergies Sells Half of US Renewable Portfolio to Apollo
2024-12-04 - TotalEnergies is acquiring Germany’s VSB Group while selling 50% of a 2-gigawatt renewable portfolio in Texas.
TotalEnergies, RWE Partner on German North Sea Wind Projects
2024-10-07 - TotalEnergies and RWE aim to commission two wind projects, N-9.1 and N-9.2, in 2031 and 2032.
TotalEnergies Pauses Business with Adani, Says it was Not Aware of US Investigation
2024-11-25 - French oil major TotalEnergies SE was not informed of a U.S. investigation into possible bribery and corruption at Adani Green Energy Ltd., it said on Nov. 25, adding it will stop financial contributions to its Adani Group investments following last week's indictment.
Surge Closes on Divestment of Alberta Non-Core Gas Assets
2024-12-20 - Surge Energy said it has focused on developing its core Sparky and southeast Saskatchewan crude oil assets, leaving the Alberta non-core assets undercapitalized.