Williams took the next step last week in a process to restore its financial strength and investor confidence. The company announced it was putting its Memphis and Alaska refineries and related petroleum assets up for sale. Williams estimates the transactions will add up to $1 billion and be concluded by the end of the year.

This plan follows Williams announced intention to sell $3 billion in assets to get its financial house in order during a period of increased scrutiny by credit rating agencies, investors and regulators (see NGI, June 3 ). Asset sales are part of Williams’ overall plan to create a net $8 billion improvement in the company’s finances in the next year. To date, the company has made nearly $5 billion in progress on its plan to improve its finances, including the sale of Kern River Gas Transmission in March to a MidAmerican Energy affiliate for $450 million in cash and assumption of $510 million in debt, and the sale of Williams Pipe Line to Williams Energy Partners LP in April for $1 billion.

CEO Steve Malcolm said this latest sale “represents great potential” for Williams to enhance its financial strength and flexibility. “Because of their unique nature, these assets provide an opportunity to move quickly and at a scale that would allow very significant progress toward creating a solid financial foundation for the future.”

Malcolm said that while the businesses have performed well, “they are niche refineries that we believe would be of much greater value to companies whose core business is refining. We have decided to deploy Williams’ future growth capital across a more tightly focused portfolio of energy businesses.”

Phil Wright, CEO of Williams’ energy services unit, said the company already has received “numerous expressions of interest and one unsolicited offer to purchase” the refining and marketing businesses in Tennessee and Alaska. “These are two unique refining and marketing enterprises that have consistently delivered solid performance for Williams. Our Memphis business unit made attractive profits during the first quarter of this year while many other refiners in the lower 48 states reported losses. This clearly demonstrates the advantageous position we’ve developed there.”

Williams plans to offer for sale its Alaska refinery, two associated petroleum products terminals, 29 convenience stores, its 3% stake of the Trans Alaska Pipeline System, and its Anchorage CargoPort ownership. In Memphis, Williams intends to offer for sale its refinery and the associated West Memphis, AR, terminal, the pipeline connecting the refinery to the terminal and the Collierville, TN, crude terminal.

With a crude oil processing capacity of 220,000 bbl/d, Williams’ Alaska refinery designates about 60% of its production to jet fuel for airlines and the U.S. military.

Williams’ Memphis refinery, with a capacity of 190,000 bbl/d, produces gasoline, jet fuel, diesel, propane and propylene to serve the growing Mid-South market, which includes one of the world’s largest air cargo hubs, one of the nation’s busiest inland water ports, the confluence of two major interstate highways and major rail interchanges. The Memphis refinery processes a variety of crude oils that are delivered via the Capline pipeline from the Louisiana Gulf Coast.

Williams has retained Lehman Brothers as an advisor to assist in the sale process, which it expects to begin immediately. Interested parties should contact Mark Wilson, Williams’ vice president of corporate development, at (918) 573-9236.

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