Williams Partners agrees to sell its interests in the Geismar Olefins facility to NOVA Chemicals for USD2.1 Billion
|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
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.
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.
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.
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
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.
Chemical is one of the largest world's petrochemical companies, a manufacturer
of polyethylene, styrene polymers, monomers, and many other related