By OGJ editors
HOUSTON, June 24 -- Williams Cos. Inc. said it will offer for sale its refineries at Memphis and in Alaska and their related assets in a move that would effectively divest the company of all of its US refining capacity.
Elsewhere in the world, the Tulsa-based energy firm still retains a percentage interest in the JSC Mazeikiu Nafta refinery at Mazeikiai, Lithuania. It is Williams's hope to sell the US refining assets for more than $1 billion, it said.
"This represents great potential for Williams to take another major step toward achieving our previously announced plan to significantly enhance our financial strength and flexibility," said Steve Malcolm, Williams chairman, president, and CEO. "Because of their unique nature, these assets provide an opportunity to move quickly and at a scale that would allow very significant progress toward creating a solid financial foundation for the future."
Malcolm added that while the plants have performed well, "they are niche refineries that we believe would be of much greater value to companies whose core business is refining."
The divestment announcement follows the company reporting that it would part with roughly $3 billion in assets as a part of an overall plan to bolster the company's finances by a net $8 billion in the coming year (OGJ, June 3, 2002, p. 24). To date, the company said it has netted $5 billion of its planned total.
Assets for sale
Williams has received "numerous" offers from interested parties for the refining properties, including one unsolicited offer, said Phil Wright, president and CEO of Williams's energy services unit. The company has declined to name any of these interested companies, however. "These are two unique refining and marketing enterprises that have consistently delivered solid performance for Williams," Wright said.
In Alaska, Williams will offer for sale its North Pole refinery, owned by its Williams Alaska Petroleum Inc. unit. Williams will also sell two associated petroleum products terminals, 29 Williams's Express-branded retail outlets, its 3% stake in the TransAlaska Pipeline System, and its William Lynxs Alaska CargoPort LLC in Anchorage.
The North Pole refinery?which has a crude oil processing capacity of 220,000 b/d?designates 60% of its production to jet fuel and 40% to producing gasoline, naphtha, heating oil, diesel fuel, gas oil, and asphalt, the company said. Distribution from the refinery is via a 20,000 bbl jet fuel terminal at Fairbanks International airport and a 700,000 bbl terminal at Anchorage.
Meanwhile, in Memphis, the company is offering its refinery and the associated West Memphis, Ark., terminal, the pipeline connecting the refinery to the terminal, and the Collierville, Tenn., crude terminal. The refinery has a production capacity of 190,000 b/d. The plant produces gasoline, jet fuel, diesel, propane, and propylene, which it sells primarily to the mid-south region of the US. The petroleum products pipeline linking the refinery to the company's West Memphis terminal was placed in service in September 2001.