Tulsa-based Williams Partners L.P. announced Wednesday that it has completed the divestiture of Williams Olefins L.L.C. to NOVA Chemicals for $2.1 billion in cash, according to a company press release. The Olefins subsidiary owns an 88.46 percent undivided ownership interest in the Geismar, Louisiana, olefins plant and associated complex.
Additionally, Williams Partners subsidiaries have entered into long-term supply and transportation agreements with NOVA Chemicals to provide feedstock to the Geismar olefins plant via Williams Partners’ ethane pipeline system in the U.S. Gulf Coast. These agreements will secure a meaningful long-term fee-based revenue stream for the partnership.
“Completing this successful transaction represents another important step in our natural gas-focused business strategy to deliver predictable long-term growth as we reduce our commodity-margin exposure,” said Alan Armstrong, chief executive officer of Williams Partners’ general partner. “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. 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.”
OK Energy Today first reported the sale on April 18, 2017. The Geismar operation has been a part of Williams since 1999, when it bought the plant from Atlantic Richfield Co. The plant was also the site of a deadly explosion in 2013.