Oklahoma-based Williams Partners has completed the $2.1 billion cash sale of its interest in the Williams Olefins LLC, which owns 88.46% of the Geismar olefins plant and complex.
The buyer is Nova Chemical, a chemical and plastics manufacturer based in Canada, and the sale is subject to a working capital adjustment.
Williams Partners subsidiaries also have entered into long-term supply and transportation agreements with NOVA Chemicals to provide feedstock to the Geismar plant via its ethane pipeline system.
Alan Armstrong, CEO of Williams Partners’ general partner, says the deal signifies the company’s focus on having a natural gas-based business to predict long-term growth and reduce commodity-margin exposure.
“Around 97 percent of our gross margins will now come from predictable fee-based sources, including the previously announced new long-term supply and transportation agreements with NOVA,” Armstrong says. “We look forward to supporting NOVA’s strategy in the Gulf Coast with our highly reliable ethane pipeline system as part of this win-win transaction and agreement for both companies.”
Williams Partners plans to use the cash proceeds from the sale to pay off an $850 million loan and to fund some of the capital and investment expenditures in the partnership’s extensive growth portfolio.
The Geismar plant produces ethylene and propylene. It was repaired and expanded after it was damaged by an explosion in June of 2013.
