Tulsa-based Williams Partners announced Tuesday that the company is exploring a potential sale or long-term fee-based tolling services agreement to divest ownership in its olefins plant and complex in Geismar, Louisiana.
Williams currently holds an 88.5% ownership interest in the Geismar plant which was acquired in 1999 by the company.
In 2015, Williams completed an expansion of the facility that increased its ethylene production capacity by 600 million pounds per year for a total production of 1.95 billion pounds of ethylene and 114 million pounds of propylene per year.
“We believe this asset provides an attractive value proposition for those considering the timing and cost-overrun risks of building a new ethylene facility in the U.S. Gulf Coast in the coming years,” said Alan Armstrong, CEO.
If the ownership stake is sold, Williams would use a portion of the proceeds to reduce debt in order to maintain investment-grade credit metrics, with the balance used to reduce planned equity issuances.
The Geismar facility was rocked by an explosion on June 13, 2013, resulting in the deaths of two men and 114 injured workers. The plant was undergoing a $300 million ethylene expansion when it was rocked by a catastrophic rupture to a heat exchanger, destroying much of the facility.
The Geismar announcement follows the sale of Williams’ Canadian operations to Inter Pipeline Ltd. for a total of $1.35 billion Canadian dollars. The Canadian transaction is expected to close in 2016.