The Williams Companies continued unloading assets last week in its effort to strengthen its balance sheet and realign its operations. The latest sales include some of Transcontinental Gas Pipe Line’s gas transportation assets in Texas to Crosstex for $27 million and three straddle plants in Western Canada to Inter Pipeline Fund of Calgary for C$715 million (US$540 million).

Williams said the Canadian asset deal will release $30 million in U.S. letters of credit and prepayments back to it by the end of the year. It also expects to record an estimated pre-tax gain of US$190 million from the Canadian assets, which will be reported in discontinued operations in its third quarter financial results.

The sale includes 100% ownership in the Cochrane (2.5 Bcf/d) and Empress II (2.5 Bcf/d) processing plants, and Williams’ 50% stake in the Empress V facility (0.5 Bcf/d). All plants are located in southern Alberta and straddle TransCanada PipeLines’ Alberta and Mainline. The plants process about 5.5 Bcf/d, extracting natural gas liquids such as ethane and propane prior to the gas being exported from the province. Williams bought the plants as part of a $1.15 billion asset purchase from TransCanada in 2000.

The sale is expected to close in the third quarter, pending regulatory approvals.

“This sale represents the single largest source of funds that we targeted from divestitures this year,” said CEO Steve Malcolm. “As we’ve outlined before, these sales are expected to contribute toward our debt reduction strategy.”

The sale of the straddle plants does not include Williams’ olefins business, which extracts natural gas liquids and olefins from oil sands refining near Fort McMurray, AB.

Inter Pipeline, which operates 3,100 miles of pipelines and 1.2 million barrels of petroleum storage, said it will boost cash distributions to holders of its publicly traded units to C75 cents a year from C72 cents after the deal closes. It said that last year, the assets generated C$646 million of revenue and C$67 million of operating earnings. The acquisition “will allow us to become a major player in the NGL extraction business with competitively positioned, world-scale operations,” said CEO David Fesyk. Inter Pipeline will fund the deal with short-term debt and an equity issue. It will sell 33 million subscription receipts at C$7.55 each in a bought deal with proceeds expected to be C$250 million.

Crosstex Energy LP, a Dallas-based midstream natural gas company, announced late Wednesday that it had executed a definitive agreement to acquire from Williams certain onshore pipeline assets south of its Transco Compressor Station 30 in Wharton County, TX, for $27.4 million.

Closing on the interstate pipes is subject to receipt of abandonment authorization from interstate service, which would result in the pipeline being integrated into Crosstex’s existing intrastate pipelines and no longer subject to Federal Energy Regulatory Commission jurisdiction. The filing is expected to be made with FERC by Williams and Crosstex within the next three weeks. Proceedings are expected to take three to nine months to complete.

Crosstex is also currently finalizing agreements with Williams to acquire two unregulated pipeline assets that are interconnected with the Transco assets for $2.6 million.

“These assets will provide access to significant additional supplies of rich and lean gas, opportunities to further optimize and integrate operations on our intrastate Gulf Coast and CCNG systems, and access to new markets in Texas,” said Crosstex CEO Barry E. Davis. “In the future, these assets will provide Crosstex additional opportunities to serve gas producers and markets in deep South Texas, not currently accessed by our existing pipeline systems, as well as enhance our overall position in this key gas supply and market region.”

The Transco assets, located in 15 counties in South Texas, include 500 miles of 24- and 26-inch diameter pipeline. The lines extend from Hidalgo County in the south across the company’s CCNG and Gulf Coast systems to Wharton County in the north and west to McMullen County. Current throughput is about 200,000 MMBtu/d, with a capacity of 600,000 MMBtu/d

Crosstex currently provides services for more than 1.5 Bcf/d of gas, and operates more than 4,500 miles of pipeline, five processing plants and more than 60 natural gas treating plants.

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