Williams Partners Explores Sales of Geismar Plant

Williams Partners is looking to sell its majority 88.5% stake in the Geismar, Lousiana, USA, olefins plant as it seeks further funds to expand its natural gas business. The Oklahoma energy company said it has begun an adviser-led process to explore the monetization of its interest which may include a possible sale or a long-term, fee-for-service tolling agreement. Should a sale go ahead, it said a portion of the proceeds would lower debt to allow the company to maintain an investment-grade credit rating, while the balance would reduce planned equity issuances.

“Given the attractive long-term outlook for US ethylene crackers, we believe our Geismar plant presents an attractive investment opportunity for potential buyers, especially those seeking to quickly backward integrate into ethylene in the US Gulf Coast. In addition, we believe this asset provides an attractive value proposition for those considering the timing and cost-overrun risks of building a new ethylene facility in the US Gulf Coast in the coming years,” said CEO Alan Armstrong.

He added that the proposal is consistent with Williams’ strategy to narrow its focus and allocate capital to its strong core, natural gas-centered business. Williams is said to be seeking to reduce its need to approach capital markets for funds to expand its natural-gas pipeline network after a $33 billion merger plan with Dallas-based rival Energy Transfer Equity failed in July.

The move comes about a month after Williams Partners and owner Williams agreed to sell their Canadian operations to Inter Pipeline for 1.35 billion Canadian dollars. The transaction is expected to close this year. The Geismar plant, which is mainly an ethane-fed, light-end natural gas liquids cracker, suffered an explosion in June 2013 when work on an expansion project had nearly finished. Two people died and 114 were injured in the tragedy. The expansion was finished last year, increasing ethylene capacity by 272,000 t/y to 885,000 t/y.