18 Apr Williams Partners LP sharpens natural gas focus with chemical plant sale
Williams Partners LP (NYSE: WMB) has agreed to sell its stake in a unit that owns 88% of an olefins plant in Louisiana to Nova Chemicals, in a cash deal worth US$2.1 billion.
This divestment decision by the US-based pipeline operator represents the latest episode in its strategy of sharpening its focus on natural gas.
Chief executive officer Alan Armstrong said: “The Williams Olefins transaction and these announced new supply and transportation agreements fortify our focus on natural gas market fundamentals, reduce our commodity margin exposure and secure our fee-based Gulf Coast transportation business.”
Armstrong later divulged that the move was consistent with Williams’ strategy to allocate capital to its core business, centred on natural gas.
Williams Partners expects to generate 97% of its fee-based revenue from natural gas sales after the close of the Louisiana plant sale.
The plant, located in the Geismar region of Louisiana, produces around 1.95 billion pounds of ethylene annually, a key component in the manufacturing of chemicals.