Williams expands in Marcellus; acquires Cabot midstream assets
Williams Partners LP is expanding its midstream business in Pennsylvania's Marcellus shale, acquiring Cabot Oil & Gas Corp.’s midstream assets in Susquehanna County, Pa., for $150 million.
Christopher E. Smith
OGJ Pipeline Editor
HOUSTON, Nov. 19 -- Williams Partners LP is expanding its midstream business in Pennsylvania's Marcellus shale, acquiring Cabot Oil & Gas Corp.’s midstream assets in Susquehanna County, Pa., for $150 million. The assets include about 75 miles of gathering pipelines and two compressor stations, with the transaction expected to close in the fourth quarter, subject to customary closing conditions and regulatory approval. The acquired Cabot assets gather about 230 MMcfd of Cabot's natural gas production.
Williams Partners also added more than $150 million of expansion capital to fund 2011 construction of additional gathering assets, including compression and dehydration, augmenting the assets acquired from Cabot. The partnership says it will continue to invest additional capital beyond 2011 to further expand the system, with the combined gathering system being capable of delivering roughly 1.2 bcfd of gas over the next 2-3 years.
The new system will connect with Williams Partners' previously announced Springville gathering pipeline in Susquehanna County. The Springville system is under construction and expected to be operational mid-2011.
The partnership also agreed to a new long-term dedicated gathering agreement with Cabot for its production in the northeast Pennsylvania area of the Marcellus shale. The 25-year agreement covers 138,000 gross acres.
Williams Partners plans to fund both the $150 million purchase and the subsequent capital projects with cash on hand, borrowings from its credit facility and capital market transactions.
Contact Christopher E. Smith at email@example.com.