Williams plans to sell its Kansas Hugoton natural gas gathering system for $100 million cash to FrontStreet Hugoton LLC as part of its plan to strengthen its balance sheet and more tightly focus on its portfolio of energy businesses. The final sale price will be subject to certain post-closing adjustments, the Tulsa-based company said. To date, Williams has made nearly $5 billion so far in its plan to improve its liquidity, part of an overall fiscal program to create a net $8 billion within the next year.

Extending over seven counties in southwest Kansas, the Hugoton natural gas gathering system comprises more than 1,800 miles of gathering lines, from 2-30 inches in diameter, with approximately 55,000 hp of compression. BP America Production Co. operates the system. The closing is expected by July 31.

“The sale will help us focus our midstream operations in our core growth areas in Wyoming, the San Juan Basin and the Gulf Coast, particularly the deepwater Gulf of Mexico, said Phil Wright, CEO of Williams energy services unit. The energy services unit is one of the largest independent service providers in the Gulf, concentrating on moving production from deepwater to markets onshore.

Earlier this year, Duke Energy Field Services (DEFS) and a unit of Williams agreed to an exchange gas gathering and processing interests located in Wyoming, Texas and Oklahoma (see Daily GPI, Jan. 17 ). Under the agreement, Williams received DEFS’s 34% interest in the Echo Springs processing plant and related gathering system near Wamsutter, WY. In exchange, DEFS received Williams ‘ Oklahoma-based Hugoton gathering system and three gas processing plants.

FrontStreet Hugoton is an affiliate of FrontStreet Partners LLC, a private investment firm specializing in energy consulting and investment services, with offices in Darien, CT and Houston. Its energy practice is comprised of individuals who have worked as business unit heads at major oil companies and call themselves business “turnaround” specialists. FrontStreet said it is “a resource for businesses wishing to grow their capital by means of the issuance of new debt or equity instruments.”

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