Energy infrastructure provider,
Williams Partners L.P.
) announced that it has acquired
Williams Cos. Inc.
) currently in-service Alberta, Canada operations for $1.2
The acquisition will be immediately accretive to Williams
Partners and positions it for future growth in Canada. The assets
being acquired include an oil sands offgas processing plant near
Fort McMurray, about 260 miles of NGL and olefins pipelines, as
well as an NGL/olefins fractionation facility and butylene/butane
splitter facility at Redwater.
The Canadian operations have competitive advantages and
long-term contracts that are expected to produce strong cash
flows for Williams Partners. The operating results are expected
to contribute distributable cash flow of about $135 million to
$160 million for the remainder of 2014 and $200 million to $240
million in 2015.
Williams Partners funded the acquisition with the issuance to
Williams Cos. of 25.6 million Class D payment-in-kind (PIK)
limited-partner units, $25 million in cash and an increase to the
general partner's capital account to maintain Williams Cos.' 2%
general-partner interest. Williams currently owns about 66% of
Williams Partners, including the general-partner interest.
Williams Partners is an energy master limited partnership
engaged in gathering, transportation, treating and processing of
natural gas as well as fractionation and storage of NGLs. The
partnership owns interests in three major interstate natural gas
pipelines that together deliver 14% of the natural gas consumed
in the U.S. The partnership's gathering and processing assets
include large-scale operations in the U.S. Rocky Mountains as
well as onshore and offshore Gulf of Mexico.
Williams Partners currently carries a short-term Zacks Rank #3
(Hold). Better-ranked stocks in the same sector include
Willbros Group Inc.
Patterson-UTI Energy Inc.
). Both these stocks hold a Zacks Rank #1 (Strong Buy).
PATTERSON-UTI (PTEN): Free Stock Analysis
WILLBROS GROUP (WG): Free Stock Analysis
WILLIAMS COS (WMB): Free Stock Analysis
WILLIAMS PTNRS (WPZ): Free Stock Analysis
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