Williams Cos. Inc., Tulsa, is selling its Alaskan business interests, including its refinery, in three separate transactions to three companies for a total of $265 million, subject to closing adjustments.
Williams is divesting its Alaska operations through the following transactions:
- Flint Hills Resources LP agreed to buy Williams's 220,000 b/d refinery at North Pole, two petroleum terminals in Anchorage and Fairbanks, and the crude oil and refined products inventories. Flint Hills is a wholly owned subsidiary of Koch Industries Inc., Wichita.
- Koch Alaska Pipeline Co. LLC, a subsidiary of Koch Pipeline Co. LP, agreed to buy Williams's 3% interest in the TransAlaska Pipeline System.
- Holiday Stationstores, Minneapolis, agreed to purchase 26 convenience stores.
In upstream news:
- ConocoPhillips announced plans to pull out of Trinidad and Tobago by selling its shares in Phoenix Park Gas Processors Ltd. (PPGPL).
- Peruvian President Alejandro Toledo approved the transfer by Lima-based Pluspetrol Peru Corp. SA to Algerian firm Sonatrach Peru Corp. SAC of 10% interest in the consortium for Camisea natural gas fields development.
- ChevronTexaco agreed to acquire additional working interest and assume operatorship of the Blind Faith discovery, 162 miles southeast of New Orleans, from BP Exploration & Production Inc.
- Kinder Morgan Energy Partners LP has signed two purchase and sale agreements with Marathon Oil Corp. unit Marathon Oil Co. for KMEP to acquire Marathon's 42.45% working interest in its Yates oil field unit and also Mara- thon's 100% interest in the Yates Gathering System (YGS) in the Permian basin of West Texas for $225.5 million total.
- Oneok Inc., Tulsa, said wholly owned subsidiary, Oneok Energy Resources Co., agreed to acquire $240 million of East Texas natural gas and oil properties and related gathering systems from Wagner & Brown Ltd. of Midland, Tex.
- Chesapeake Energy Corp., Oklahoma City, acquired $200 million of South Texas natural gas assets from private Laredo Energy LP, Houston, and its partners.
In pipeline and marketing news:
- Duke Energy Corp., Charlotte, NC, sold its 30% interest in Vector Pipeline to Enbridge Inc., Calgary, and DTE Energy Co., Detroit, for $145 million.
- ConocoPhillips plans to close in the fourth quarter its sale of Circle K Corp. capital stock to Canadian convenience store retailer Alimentation Couche-Tard Inc.
Williams's Alaska divestitures
Williams announced its intention to divest the North Pole refinery last year (OGJ Online, June 24, 2002).
In addition to anticipated cash proceeds, the transaction will eliminate two letters of credit that Williams has with the state of Alaska, releasing $90.9 million to Williams.
The transactions, subject to regulators' approvals and conditions, are expected to close in first quarter 2004. Conditions include Flint Hills Resources' successful completion of a crude oil supply contract with the state of Alaska, requiring legislative approval.
The TAPS interest also is subject to preferential purchase rights by the other owners in the pipeline system.
ConocoPhillips
ConocoPhillips's sale of its Trinidad and Tobago assets coincides with its decision to streamline its midstream assets. The company said it continues to maximize the benefits from the merger of Conoco Inc. and Phillips Petroleum Co.
PPGPL is ConocoPhillips's sole interest in Trinidad and Tobago. Conoco- Phillips owns 39% of PPGPL and National Gas Co. Ltd. of Trinidad & Tobago has 51% controlling interest.
ChevronTexaco
Under the agreement's terms, ChevronTexaco will earn the right to operate Blind Faith with a 50% interest. BP will own a 50% interest. Blind Faith is on Mississippi Canyon Block 696.
The Blind Faith discovery well was drilled in June 2001 in 6,900 ft of water. The discovery well partnership consisted of BP with 77.5% interest and ChevronTexaco with 22.5% interest. An additional appraisal well is planned by Dec. 31.
Kinder Morgan
KMEP negotiated with Marathon to buy its Yates oil field interest since midyear (OGJ Online, June 23, 2003); KMEP already holds 7.5% interest in Yates, which has largest proven onshore reserves in the Lower 48.
Yates field is "an ideal asset for CO2 flooding," KMEP said.
The companies expect to close the transaction later this month. After closing the deal, Marathon said the sale will result in a cash benefit of about $390 million.
Oneok
Oneok will acquire from Wagner & Brown 177.2 bcfe of proved gas reserves, with additional probable and possible reserve potential. Current net production from these properties is about 26 MMcfed.
The acquisition is expected to close before Dec. 31.
Earlier this year, Oneok sold US Midcontinent gas assets to Chesapeake Energy Corp., Oklahoma City, for $300 million (OGJ, Dec. 23, 2002, p. 32).
Chesapeake
Chesapeake acquired an internally estimated 108 bcfe of proved and 88 bcfe of probable or possible reserves, continuing an expansion by acquisition outside its core operations in the Anadarko basin of Oklahoma.
The properties average 30 MMcfed, and the proved reserves have a reserves-to-production index of 10 years, are 100% natural gas, and are 32% proved developed.
Enbridge, Duke
Enbridge and DTE currently own 70% of the Vector pipeline. Each will pay $72.5 million for a 15% share of Duke Energy's ownership stake. Enbridge owns 60% of Vector with DTE owning 40%.
The 348 mile Vector Pipeline transports Western Canadian natural gas from the Chicago-area market hub in Joliet, Ill., to the hub at Dawn, Ont. Duke Energy acquired ownership interest in the pipeline through its $8.5 billion acquisition of Westcoast Energy Inc. of Vancouver (OGJ Online, Sept. 21, 2001).
Circle K
Last month, ConocoPhillips agreed to sell to Alimentation Couche-Tard assets that include 1,663 retail outlets in 16 states, the Circle K brand, and the franchise relationship with more than 350 Circle K stores. As part of the agreement, ConocoPhillips will continue to supply 1.2 billion gal/year of gasoline for the next 2-5 years at market-related pricing. ConocoPhillips's international marketing assets are not included.