Williams on Friday announced it is considering selling its 6,000 mile-long Central interstate natural gas pipeline system in what it called “another definitive step toward strengthening its financial flexibility and developing a more tightly focused portfolio of energy businesses.” Earlier this year, Williams agreed to sell Kern River Gas Transmission and 1.47 million shares of convertible preferred stock to Berkshire Hathaway subsidiary MidAmerican Energy Holdings Co. (see NGI, March 11).

Just three months ago Williams proposed an expansion of the Central system, which received bids totaling 66,800 Dth/d during a binding open season that concluded in April (see NGI, April 29). The pipeline was expected to file an application for the proposed Alva to Southwest Missouri Expansion Project with the Federal Energy Regulatory Commission that would include additions to various line segments in southwest Missouri and southeast Kansas. Service for the expansion was expected to begin as early as the second quarter of 2003. Central connects to the Overthrust, but most of its system is centered in Kansas and Oklahoma.

The Central system transports natural gas from Kansas, Oklahoma, Texas, Wyoming and Colorado to markets in the Midcontinent. The system’s design capacity is 2.3 Bcf/d, with an annual throughput of 337.5 TBtu. The line has a seasonal storage capacity of 43 Bcf. Central has headquarters in Owensboro, KY, and has 368 employees located across its office and field locations.

Several parties have “expressed strong interest” in the pipeline, said Williams, but potential buyers were not disclosed and terms of a possible sale were also not revealed.

“This would mark another major accomplishment toward enhancing Williams’ financial strength and flexibility, allowing us to more tightly focus our future capital investments,” said CEO Steve Malcolm. “We remain committed to the interstate natural gas pipeline industry and will focus our efforts there in systems that serve faster-growing markets.”

Doug Whisenant, CEO of Williams’ interstate natural gas pipeline unit, said, “We are focusing our future capital investment in our Northwest Pipeline, Texas Gas and Transco pipeline systems, which serve some of the largest and fastest growing markets in North America. The markets served by Central are stable and growing at a steady, but slower, pace. The stable performance of this business would be ideal for certain potential buyers.”

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