Williams has signed three agreements to sell off its entire remaining business interests in Alaska for a total of $265 million in cash, subject to closing adjustments. The transactions will eliminate two cash-collateralized letters of credit that Williams has with the state, releasing $90.9 million back to the company.
Koch Alaska Pipeline Co. has agreed to buy Williams’ entire 3.1% interest in the crude oil Trans Alaska Pipeline System (TAPS). Holiday Stationstores of Minneapolis has agreed to purchase 26 convenience stores, and Flint Hills Resources is buying a 220,000 b/d refinery at North Pole and two petroleum terminals in Anchorage and Fairbanks, as well as crude oil and refined products inventories.
Williams CEO Steve Malcolm said the company regretted having to leave the state but “this is simply a new day for Williams. We’re exiting the refining sector, focusing on our natural gas businesses and wrapping up divestitures that we targeted for sale.”
The transactions are expected to close in the first quarter of 2004. The sales are subject to Hart-Scott-Rodino review and other conditions and approvals including the completion of a crude oil supply contract between Flint Hills and the state of Alaska that requires legislative approval. The TAPS interest also is subject to preferential purchase rights by the other owners in the pipeline system.
Williams originally announced its intention to divest the North Pole refinery in June 2002. Since that time, Williams has also divested its other refining interests in Memphis, TN, and Lithuania. The sales are part of the company’s commercial strategy to concentrate on natural gas production, processing and pipeline transportation.
“We’ve taken command of our finances and our future,” said Malcolm. “Our asset sales have served to build a healthier Williams. We have recently completed the early retirement of $950 million in debt and made some modest incremental investments to increase our rig count in the Rockies.”
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