Williams Partners says it’s looking at ways to convert its Geismar olefins plant into another source of cash, including a possible sale or long-term fee-based services agreement.
As The Wall Street Journal reports, Williams Partners, an affiliate of natural gas pipeline company Williams Cos., operates and has an 88.5% ownership interest in the Geismar plant.
“Given the attractive long-term outlook for U.S. ethylene crackers, we believe our Geismar plant presents an attractive investment opportunity for potential buyers, especially those seeking to quickly backward integrate into ethylene in the U.S. Gulf Coast,” Chief Executive Alan Armstrong says in a statement.
Williams has been trying to reduce the need to tap capital markets for funds to expand its expansive network of natural-gas pipelines since a failed $33 billion merger plan with Energy Transfer Equity, an oil-and-gas pipeline company based in Dallas.
The move comes about a month after Williams and Williams Partners reached a deal to sell their Canadian operations to Inter Pipeline Ltd. for $1.03 billion.
The Geismar plant, which produces ethylene and propylene, was repaired and expanded after it was damaged by an explosion in June of 2013. Last year, the plant was put back in service, with expanded ethylene production capacity of 600 million pounds a year, for a total production of 1.95 billion pounds of ethylene and 114 million pounds of propylene a year.
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