In a mutual agreement, Williams is terminating the sale of some of its South Texas natural gas transmission lines to Enbridge Energy Partners LP, a deal originally set in October 2001. The South Texas system includes unregulated gathering systems and 492 miles of FERC-regulated pipelines. The two regulated pipelines extend from the Texas-Mexico border near Laredo and McAllen, TX, to Transco Station 30, where they connect with Williams’ Transco mainline.

Enbridge Inc. subsidiaries agreed in October 2001 to purchase the Williams’ assets for $41 million (see Daily GPI, Oct. 12, 2001). The transaction was conditioned upon approval by the Federal Energy Regulatory Commission that Williams could abandon the facilities to Enbridge and upon a finding that the assets would not be subject to FERC jurisdiction under the Natural Gas Act following the sale. In October 2002, Enbridge then assigned the purchase to Enbridge Energy Partners.

Last month, FERC issued an order denying abandonment of the South Texas system, which reversed a previous ruling granting the necessary approvals. The decision, said Williams, effectively prevents the sale from proceeding under the terms of the purchase and sale agreement. Williams plans to pursue an alternative transaction with Enbridge Partners or other buyers under a structure that is responsive to the May 2 FERC order, the company said in a statement.

Two related transactions involving assets not subject to FERC regulation that closed in January 2002 remain in effect. Those transactions involved the sale by Williams to Enbridge of one gas treating plant, one processing plant and a gathering system, which also were assigned Enbridge Partners in October 2002.

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