Williams Cos. stake in Access Midstream for $2.4 billion
BY ROD WALTON World Staff Writer
Wednesday, December 12, 2012
12/12/12 at 2:49 AM
Local companies are major players in a thriving industry.
Williams Cos. Inc. announced Tuesday that it will pay $2.4 billion for a large stake in Chesapeake Energy Corp.'s former midstream spinoff.
Tulsa-based Williams is taking a 50 percent interest in Access Midstream Partners GP and 25 percent of Access Midstream Partners LP. The latter partnership owns and operates natural gas gathering and processing assets in the Marcellus, Utica, Eagle Ford and Haynesville shales as well as the Mississippi Lime and Granite Wash in Oklahoma, among other properties.
Oklahoma City-based Access Midstream, known as Chesapeake Midstream Partners LP before the namesake parent company sold it to raise cash earlier this year, will spend another $2.16 billion to acquire most of Chesapeake's remaining gathering and processing assets.
Williams' partner on the Access Midstream deal is Global Infrastructure Partners, which bought its stake directly from Chesapeake. Williams and GIP will own Access Midstream GP, which holds the general partner control in Access LP, in a 50-50 arrangement, while Williams and GIP will own 25 percent and 43 percent, respectively, in the pipeline and processing company.
"This transaction provides for a strategic investment by Williams in ACMP (Access) - two Oklahoma-based companies focused on providing safe, reliable infrastructure services to the natural gas industry - with an attractive, very strong financial sponsor, GIP," Williams CEO Alan Armstrong said in a statement.
"We have great confidence in ACMP's proven management team, and our comprehensive due diligence efforts on this transaction substantiate the depth and quality of talent throughout ACMP."
All told, Williams should gain strong positions in several major producing formations, with 8.7 million acres under long-term dedications from producers. Williams is hopeful the deal will close by the end of this month.
Access Midstream Partners LP will continue as an independent, publicly traded firm and keep its Oklahoma City headquarters following the transaction, Williams said.
Oklahoma City-based gas production giant Chesapeake Energy, desperate to raise cash due to a liquidity crisis and low natural gas prices, sold its pipeline assets to Global Infrastructure Partners for $4 billion in June. Williams, meanwhile, sold its 83 percent stake in a Gulf of Mexico region olefins production facility to Williams Partners LP for $2.4 billion nearly two months ago.
In a separate matter, Williams reported that Chesapeake has affirmed its support for a proposed natural gas liquids pipeline connecting the Marcellus and Utica shale production areas in the Northeast to markets in the Gulf Coast.
Williams is developing the NGL project.
"Williams is excited to have the opportunity to work with Chesapeake to help optimize and monetize its tremendous acreage position," Armstrong said.
Williams Partners owns and operates interstate gas pipelines and processing assets. Williams also owns the controlling stake in Williams Partners.
Original Print Headline: Williams buys into Access Midstream
Rod Walton 918-581-8457
Williams CEO Alan Armstrong: "This transaction provides for a strategic investment in ... two Oklahoma-based companies."