Continuing its plan to divest non-core assets and strengthen its balance sheet, Williams’ midstream gas and liquids group sold three natural gas gathering systems located in South Texas for $6 million to Hurd Investments of San Antonio and a subsidiary of Houston-based Copano Energy. The companies purchased Williams’ 76% partnership interest in the Webb-Duval system, and 100% ownership interests in the Olmitos and Cinco Compadres systems.

The three gathering systems include approximately 125 miles of natural gas pipeline with a nominal capacity of 250 MMcf/d. As a result of the transaction, Copano now holds 62.5% of the three gathering systems and has become the operator. The remaining 37.5% interest is now held by Hurd.

“This is consistent with our strategy of rationalizing non-core assets,” said Steve Springer, senior vice president of Williams’ midstream gas and liquids group. “We have already completed a $50 million sale of other South Texas assets to Enbridge this year and traded some gathering interests in the Midcontinent to Duke for a larger stake in a Wyoming gas processing plant.”

Concentrated primarily in Western Canada, Wyoming, the San Juan Basin and offshore Gulf of Mexico, Williams’ gathering and processing unit has expanded both of its gas processing plants in Wyoming over the past two years and has several large-scale construction projects underway in the Gulf to serve deepwater gas producers.

“This purchase fits Copano’s strategy of building our portfolio of rich gas gathering assets that can be connected to our Houston Central processing plant through our alliance with Kinder Morgan Texas Pipeline,” said John Eckel, Copano’s CEO. “As operator, Copano looks forward to providing a highly competitive gathering alternative for producers in this important market area.”

Copano Energy controls more than 1,300 miles of natural gas and natural gas liquids pipelines in South Texas and the Texas Gulf Coast market region, together with the second largest processing plant in the region in terms of gas throughput.

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