Williams Partners selling to NOVA Chemicals
On Monday, Williams Partners LP announced it has agreed to sell its stake in unit that owns 88.46 per cent interest in a Louisiana olefins plant to NOVA Chemicals for $2.1 billion in cash.
After the deal closes, Williams Partners subsidiaries will enter into a long-term supply and transportation agreements to provide NOVA Chemicals with feedstock for the Geismar, Louisiana olefins plant.
The company says it is selling the olefins plant so it can focus on natural gas fundamentals, reduce commodity margin exposure and secure its fee-based Gulf Coast transportation business.
Chief Executive Alan Armstrong said “When the Williams Olefins transaction closes, we expect to be at 97 per cent 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.”
According to a press release issued by the company, Williams Partners is planning to use cash proceeds from the transaction to pay off its $850 million term loan as well as fund capital and investment expenditures.
Armstrong added, “We now look forward to helping NOVA grow profitably here in the Gulf Coast by providing highly reliable feedstock supply via our recently expanded Bayou Ethane Pipeline network. ”
The sale of the olefins plant is expected to close this summer.