By OGJ editors
HOUSTON, Sept. 16 -- Williams Cos. Inc. has inked a definitive agreement to sell its 6,000 mile Central natural gas pipeline to Southern Star Central Corp., a wholly owned unit of AIG Highstar Capital LP, for $380 million in cash and the assumption of $175 million in debt. The sale marks the most recent of numerous divestitures for Tulsa-based Williams, which has been in the process of selling off some of its assets in order to strengthen its balance sheet (OGJ Online, Aug. 20, 2002).
The Central system, which is headquartered in Owensboro, Ky., transports gas from Kansas, Oklahoma, Texas, Wyoming, and Colorado to the US Midwest and has a design capacity of 2.3 bcfd of gas.
The sale does not mark Williams's exit from the US natural gas transportation market, the company said. "Williams remains committed to the interstate natural gas pipeline industry," said Doug Whisenant, who heads Williams's interstate natural gas pipeline unit. Whisenant added that the company will continue to focus its efforts on its three other US gas pipeline units: Transcontinental Gas Pipe Line Corp., Northwest Pipeline Corp., and Texas Gas Transmission Corp.
Williams expects the deal, which is expected to close in 60 days, to reduce its capital expenditures by $50 million over the next 16 months. The company also will record a pretax loss of $90-95 million from the sale in the third quarter.