Williams ponders sale of Western Canadian assets

Williams Cos. Inc. said it is considering selling its natural gas processing and liquids extraction operations in Western Canada.

Jul 30th, 2002

By OGJ editors

HOUSTON, July 30 -- Williams Cos. Inc. said it is considering selling its natural gas processing and liquids extraction operations in Western Canada. The Tulsa-based energy company, now faced with concerns over financing issues and investment downgrades, has been selling assets to shore up its balance sheet for the last few months.

The company said it would focus its midstream business on assets in Wyoming, the San Juan basin, and the deepwater Gulf of Mexico.

The potential sale's terms are unknown, Williams said, although the company has "received unsolicited expressions of interest" in the assets. "In light of our balance-sheet strengthening plan, we believe we must consider selling them to parties for whom they may be a better strategic fit," said Phil Wright, president and CEO of Williams's energy services unit.

Asset details
Williams acquired the assets in Western Canada from TransCanada PipeLines Ltd. last year, essentially marking the company's first significant entry into Canada (OGJ Online, Aug. 3, 2000). The assets comprise a total of about 6 bcfd of gas processing capacity, about 225,000 b/d of natural gas liquids production capacity, an NGL pipeline system, and more than 5 million bbl of NGL storage capacity, Williams said.

"While the growth prospects for the Western Canadian basin have proven even better than our original perspective 2 years ago," Wright said, "our midstream interests in the US are more integrated and more complementary to other Williams assets."

Earlier this month, Williams signed a letter of intent to sell its Kansas Hugoton natural gas gathering system to FrontStreet Hugoton LLC, a unit of FrontStreet Partners LLC, Darien, Conn., for $100 million (OGJ Online, July 9, 2002). Also earlier this summer, Williams 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 (OGJ Online, June 24, 2002).

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