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Williams Partners agrees to sell its interests in the Geismar Olefins facility to NOVA Chemicals for USD2.1 Billion

April 19/2017
MOSCOW (MRC) -- Williams Partners LP, Tulsa, has entered a deal to sell its indirect ownership interest in the recently rebuilt and expanded Geismar, La., olefins plant and complex to Nova Chemicals Corp., Calgary, (OGJ Online, Sept. 9, 2016), said the company on its site.

As part of the agreement, Nova Chemicals will pay Williams Partners USD2.1 billion in cash to purchase 100% interest in Williams Olefins LLC, which owns an 88.46% undivided stake in the Geismar olefins plant and associated complex, the companies said.

Alongside ownership interest in the 1.95 million-tonne/year Geismar ethylene plant, Nova Chemicals also will acquire 525 acres of undeveloped land next to the complex as well as Williamsí interest in the ethylene trading hub at Mont Belvieu, Tex., Nova Chemicals said.

The companies said they expect to finalize the transaction this summer, pending customary closing conditions and regulatory approvals. After closing the deal, Williams subsidiaries plan to enter long-term fee-for-service agreements with Nova Chemicals for supply and transportation of ethane feedstock from fractionation and storage sites in Mont Belvieu to the Geismar plant via Williams Partnersí 270-mile Bayou ethane pipeline.

Consistent with Williamsí strategy to allocate capital to its core, natural gas-focused business, sale of the Geismar olefins operations and proposed associated supply and transportation agreements also align with the companyís program of reducing its commodity margin exposure and securing a long-term, fee-based revenue stream for its US Gulf Coast transportation business, said Alan Armstrong, Williams Cos. Inc.ís president and chief executive officer.
Williams Partners plans to use the cash proceeds from the transaction to pay off its $850-million term loan and to fund a portion of the partnershipís capital and investment expenditures that form part of its extensive growth portfolio, the company said.

For Nova Chemicals, the proposed acquisition creates an opportunity to benefit from access to large US shale reserves while expanding its presence at the US Gulf Coast, a key component of the companyís long-term growth strategy, according to Todd Karran, Nova Chemicalsí president and chief executive officer.

In addition to buying Williamsí Geismar olefins business, Nova Chemicals is working on two additional projects to help meet growing consumer demand for polyethylene (PE), including its recently signed deal with Total SA and Borealis AG of Vienna to build a 1 million-tpy ethane steam cracker and 625,000-tpy PE production plant at Houston-based Total Petrochemicals & Refining USA Inc.ís manufacturing sites along the Texas Gulf Coast, as well as the proposed construction of a PE plant in Sarnia, Ont., based on its proprietary Advanced SCLAIRTECH technology.

As MRC informed earlier, NOVA Chemicals Corporation, a leading supplier of polyethylene in the Americas, has announced the start up of its new world-scale linear low density polyethylene (LLDPE) gas phase reactor at its Joffre, Alberta site.

Nova Chemical is one of the largest world's petrochemical companies, a manufacturer of polyethylene, styrene polymers, monomers, and many other related products.
Author:Anna Larionova
Tags:PE, ethylene, Nova Chemicals, Williams, Canada.
Category:General News
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