Market Overview

Williams Partners Completes Acquisition of Williams' Gulf Olefins Business

TULSA, Okla.--(BUSINESS WIRE)--

Williams Partners (NYSE: WPZ) today announced that it has completed the transaction to acquire Williams' (NYSE: WMB) approximately 83-percent undivided interest in the Geismar olefins production facility, as well as Williams' refinery-grade propylene splitter for $2.264 billion and pipelines in the Gulf region, for $100 million. Additionally, Williams Partners will be responsible for the completion of the ongoing expansion of the Geismar facility projected to cost $270 million and additional pipelines projected to cost approximately $160 million.

The addition of olefins production to Williams Partners' business is expected to bring more certainty to cash flows that were previously exposed to the market for ethane, which is projected to experience periods of volatility as feedstock demand for infrastructure lags new supplies from shale-gas production. North American ethylene demand is expected to remain strong, given its continuing advantaged cost, compared with ethylene derived from crude-oil based feedstock.

Williams Partners expects that the addition of olefins production to its business via this acquisition will be accretive to distributable cash flow, on a per-unit basis for the partnership's unitholders. Williams Partners funded the acquisition with the issuance to Williams of 42.8 million Williams Partners limited-partner units, $25 million in cash and an increase to the general partner's capital account to maintain Williams' 2-percent general-partner interest.

Williams gains increased distributions from Williams Partners for the limited-partner units it received as consideration for the transaction. The increased distributions from Williams Partners support Williams' dividend growth strategy.

Williams owns approximately 70 percent of Williams Partners, including the general-partner interest.

About Williams Partners L.P. (NYSE: WPZ)

Williams Partners L.P. is a leading diversified master limited partnership focused on natural gas transportation; gathering, treating, and processing; storage; natural gas liquid (NGL) fractionation; and oil transportation. The partnership owns interests in three major interstate natural gas pipelines that, combined, deliver 14 percent of the natural gas consumed in the United States. The partnership's gathering and processing assets include large-scale operations in the U.S. Rocky Mountains and both onshore and offshore along the Gulf of Mexico. Williams (NYSE: WMB) owns approximately 66 percent of Williams Partners, including the general-partner interest. More information is available at www.williamslp.com.

About Williams (NYSE: WMB)

Williams is one of the leading energy infrastructure companies in North America. It owns interests in or operates 15,000 miles of interstate gas pipelines, 1,000 miles of NGL transportation pipelines, and more than 10,000 miles of oil and gas gathering pipelines. The company's facilities have daily gas processing capacity of 6.6 billion cubic feet of natural gas and NGL production of more than 200,000 barrels per day. Williams owns approximately 66 percent of Williams Partners L.P. (NYSE: WPZ), one of the largest diversified energy master limited partnerships. Williams Partners owns most of Williams' interstate gas pipeline and domestic midstream assets. The company's headquarters is in Tulsa, Okla.

This press release includes a reference to distributable cash flow, which is a non-GAAP financial measure. Its nearest GAAP financial measure is net income. For Williams Partners L.P. we define distributable cash flow as net income plus depreciation and amortization and cash distributions from our equity investments less our earnings from our equity investments, distributions to non-controlling interests and maintenance capital expenditures. We also adjust for payments and/or reimbursements under omnibus agreements with Williams and certain other items. Management uses this financial measure because it is an accepted financial indicator used by investors to compare company performance and provides investors an enhanced perspective of the operating performance of the Partnership's assets and the cash that the business is generating.

Portions of this document may constitute "forward-looking statements" as defined by federal law. Although the company believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Any such statements are made in reliance on the "safe harbor" protections provided under the Private Securities Reform Act of 1995. Additional information about issues that could lead to material changes in performance is contained in the company's annual reports filed with the Securities and Exchange Commission.

Williams
Media Contact:
Julie Gentz, 918-573-3053
or
Investor Contacts:
John Porter, 918-573-0797
or
Sharna Reingold, 918-573-2078

 

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