Williams Partners LP on Thursday notified Oneok Partners LP that it would take the option to increase its ownership to 50% from 1% in their jointly owned Overland Pass Pipeline Co. LLC.
Williams agreed to pay Oneok $425 million for the additional stake; closing is expected within 30 days. “With this transaction and our strong partnership with Williams, we do not expect this change in ownership to affect our continuing efforts to grow Overland Pass Pipeline and provide the services our customers expect from us,” said Oneok Partners COO Terry K. Spencer.
The joint venture (JV) was established in May 2006 by Williams and Oneok affiliate Northern Border Partners LP to build the 760-mile Overland Pass Pipeline to carry natural gas liquids (NGL) from Opal, WY, to Conway, KS (see Daily GPI, May 4, 2006). At that time the Oneok affiliate owned 99% of the JV.
The NGL pipeline, which entered service in November 2008, can transport about 140,000 b/d, which could be expanded to 255,000 b/d with additional pump facilities.
The JV company now includes the Piceance Lateral Pipeline, a 150-mile pipeline connecting the Piceance Basin to the Overland Pass Pipeline, and the D-J Basin Lateral Pipeline, a 125-mile pipeline connecting the Denver-Julesberg Basin with the Overland Pass Pipeline. Oneok Partners, through its subsidiaries, managed the construction projects and is the operator of the pipelines.
Once the transaction closes and as long as Williams Partners owns at least 50% of the company, it would have the option to become the operator by giving Oneok Partners at least 30 days’ notice, Oneok said.
Oneok Partners said it would use the proceeds from the transaction to repay short-term debt and to fund some capital projects. The transaction is not expected to affect the partnership’s 2010 net income guidance of $450-490 million.
©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |