The Williams Companies and Williams Partners announced an agreement on Monday to sell their Canadian businesses to Calgary-based Inter Pipeline for over $1 billion.
The sale includes extraction and processing facilities in the Alberta oil sands as well as nearly 260 miles of pipelines. Inter Pipeline’s purchase will allow the company to expand its natural gas liquids business.
The Tulsa-based company spent nearly $2 billion to build out the Canadian assets over the past decade. In 2014, the assets were valued at $1.2 billion when they were transferred to Williams Partners.
Following the failed merger with Energy Transfer Equity LP, Williams decided to sell its Canadian business holdings.
“We are proud of the tremendous businesses our Canadian team has built since we first began operating in Canada in 2002,” said Alan Armstrong, Williams’ President and Chief Executive Officer. “This transaction represents significant progress on a major component of the 2016 capital and financing plan we announced in January.”
As part of the deal, the Williams Companies agreed to waive $150 million of incentive distribution rights in the quarter to facilitate Williams Partners’ consent to the sale in recognition of the value of inter-company contracts. Following the waiver, Williams Partners will receive $817 million in net consideration while the Williams Companies will receive $209 million.
The companies say they plan to use the proceeds to reduce debt.
