Williams Partners to sell stake in olefins plant to Nova Chemicals for $2.1 bn
17 April 2017
US pipeline operator Williams Partners LP today struck a deal to sell its stake in the Geismar Olefins plant in Louisiana to Nova Chemicals for $2.1 billion in cash.
Williams Partners intends to use proceeds from the sale to pay off $850 million debt, and fund a portion of its capital and investment expenses.
The company also signed a long-term feedstock supply and transportation agreements with NOVA Chemicals.
Under the terms of the deal, Williams Partners will sell its entire stake in Williams Olefins, which owns an 88.46 per cent interest in the Geismar, Louisiana, olefins plant and associated complex.
Williams Partners subsidiaries will enter into long-term supply and transportation agreements with NOVA Chemicals to provide feedstock to the Geismar olefins plant via Williams Partners' Bayou Ethane pipeline system in the US Gulf Coast.
''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.
''When the Williams Olefins transaction closes, we expect to be at 97 per cent fee-based revenues driven largely by natural gas volumes,'' he adeed.
Tulsa, Oklohama-based Williams Partners owns and operates more than 33,000 miles of pipelines system wide – including the nation's largest volume and fastest growing pipeline – providing natural gas for clean-power generation, heating and industrial use.