Williams Partners has signed a $1.2bn agreement to acquire Alberta, Canada, operations from Williams, the pipeline company that controls it.
As part of the transaction, Williams Partners will acquire assets, including an oil sands offgas processing plant near Fort McMurray, located about 260 miles of NGL and olefins pipelines.
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The company will also acquire an NGL/olefins fractionation facility and butylene/butane splitter facility at Redwater.
Williams Partners is said to gain additional fractionation business related to the development of offgas processing at the CNRL Horizon upgrader facility retained by Williams, with the expansion.
According to the company, the Alberta operations have long-term contracts that are expected to produce better cash flows for it.
Subject to commodity price fluctuations, during the remaining ten months of 2014 the operating results are expected to contribute distributable cash flow to Williams Partners of about $135m to $160m and in 2015 of $200m to $240m.
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By GlobalDataSaid to be immediately accretive to Williams Partners, the acquisition positions the partnership for future growth in Canada.
In order to fund the acquisition, the company plans to issue 25.6 million Class D payment-in-kind (PIK) limited-partner units to Williams, $25m in cash and an increase to the general partner’s capital account to maintain 2% general-partner interest of Williams.
For funding expansions at the Redwater facility, Williams Partners also can also issue up to $200m of additional PIK units to the pipeline company.
At present, Williams owns about 64% of Williams Partners, including the general-partner interest.
North American energy infrastructure company Williams owns interests in or operates 15,000 miles of interstate gas pipelines, 1,000 miles of NGL transportation pipelines, and more than 10,000 miles of oil and gas gathering pipelines.
