Williams Partners to acquire Williams' Piceance Basin gathering and processing assets
Williams Partners LP has agreed to acquire Williams' gathering and processing assets in Colorado's Piceance Basin for $782 million. Williams Partners' total consideration for the assets will include $702 million in cash and $80 million in WPZ limited-partner and general-partner units.
The assets include the Parachute Plant Complex, three other treating facilities with a combined processing capacity of 1.2 billion cf/d, and a gathering system with approximately 150 miles of pipeline. There are more than 3,300 wells connected to the gathering system, which includes pipelines ranging up to 30-inch trunk lines.
Williams Partners plans to fund the cash portion of the acquisition, which is expected to close next month, with its revolving credit facility and/or debt. The transaction is expected to be immediately accretive to distributable cash flow for Williams Partners, on a per-unit basis for the partnership's unitholders.
Williams Partners expects the new assets will generate approximately $105 million in segment profit plus depletion, depreciation and amortization for its midstream business in 2011. Both Williams Partners and Williams are providing a full update to 2010-12 earnings and capital expenditure guidance in their third-quarter 2010 financial results, which are being released today.
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