Williams Partners to purchase Williams' Gulf Olefins Biz

"The addition of the Geismar facility to Williams Partners' portfolio immediately reduces the partnership's exposure to the over-supplied ethane markets by nearly 70 percent and eliminates it by 2014, while increasing our ability to produce globally marketed ethylene," said Alan Armstrong, chief executive officer of the general partner of Williams Partners. "Bringing this natural hedge to Williams Partners makes it unique among similarly situated MLPs. In addition, it provides strong support for our continuing distribution growth."

 

Williams Partners and Williams announced an agreement for Williams Partners to acquire Williams' approximately 83-percent undivided interest in the #

Located south of Baton Rouge, La., the Geismar facility is a light-end natural gas liquid (NGL) cracker with current inlet volumes of 39,000 barrels per day (bpd) of ethane and 3,000 bpd of propane and annual production of 1.35 billion pounds of ethylene. With the benefit of a significant expansion under way and scheduled for completion by late 2013, the facility's consumption of ethane will increase to a maximum of 57,000 bpd and annual ethylene production capacity will grow by 600 million pounds to 1.95 billion pounds. Williams Partners' overall undivided ownership interest following the expansion will be approximately 88 percent.

 

Williams Partners and Williams announced an agreement for Williams Partners to acquire Williams' approximately 83-percent undivided interest in the #

Post-expansion segment profit, plus DD&A, for both the Geismar facility and the pipelines is projected to grow from $270 million in 2013 to $600 million by the end of 2014. The primary drivers of this increase in 2014 earnings and cash flows are the first full-year of expansion volumes, an assumed increase in spot ethylene prices and increased sales at these assumed higher ethylene spot prices.

 

Williams Partners and Williams announced an agreement for Williams Partners to acquire Williams' approximately 83-percent undivided interest in the #

The pipelines included in the transaction include a 212-mile ethane pipeline between Lake Charles and Geismar, a three-mile propane pipeline, a 50-mile pipeline between Port Arthur and Lake Charles, and 60 miles of product pipelines in and around the Houston Ship Channel.

 

Williams Partners and Williams announced an agreement for Williams Partners to acquire Williams' approximately 83-percent undivided interest in the #

The Internal Revenue Service recently released a private letter ruling which stated that income derived from processing NGLs into olefins at the Geismar facility and the related marketing, transporting and storing of olefins constitute qualifying income for Williams Partners L.P.