TULSA, Okla., Nov. 18, 2010 /PRNewswire-FirstCall/ -- Williams
Partners L.P. (NYSE: WPZ) announced today that it is significantly
expanding its midstream business in Pennsylvania's Marcellus Shale.
The partnership has agreed to acquire Cabot Oil & Gas
Corporation's (NYSE: COG) midstream assets located in Susquehanna County, Pa., for $150 million. The Cabot assets include
approximately 75 miles of gathering pipelines and two compressor
stations. The transaction is expected to close during the
fourth quarter, subject to normal and customary closing conditions
and regulatory clearance.
In addition, Williams Partners has added more than $150 million of expansion capital to fund the
2011 construction phase of additional gathering assets, including
compression and dehydration, which will significantly augment the
acquired assets. The partnership will continue to invest
additional capital beyond 2011 to further expand the system.
The combined gathering system will be capable of delivering
approximately 1.2 billion cubic feet per day (Bcf/d) of natural gas
over the next two to three years.
The new system will connect with Williams Partners' previously
announced Springville gathering
pipeline in Susquehanna County.
It will significantly expand the Springville system, as well as add additional
delivery points.
The partnership has also agreed to a new long-term dedicated
gathering agreement with Cabot for
its production in the northeast Pennsylvania area of the Marcellus Shale.
The 25-year agreement covers an area of mutual interest that
currently includes 138,000 gross acres.
"This additional expansion in the Marcellus Shale is an ideal
growth opportunity for Williams Partners," said Alan Armstrong, senior vice president of
Williams Partners' midstream business. "We have the opportunity to
serve another one of the biggest producers in the Marcellus with
the type of large-scale solutions required for Cabot's rapidly expanding production.
"The previously announced Springville system and this expansion will
provide significant takeaway capacity to multiple interstate gas
pipelines, including Transco," Armstrong said. "In addition
to our anchor customer agreement with Cabot, there will be future opportunities to
help third-party producers grow their volumes and access large
natural gas markets. Included among those potential producer
customers is Williams' exploration and production business, with
its significant acreage position in northeast Pennsylvania."
The previously announced Springville system is currently in the
construction phase and is expected to be operational in mid-2011.
The acquired Cabot assets
are currently gathering approximately 230 million cubic feet per
day (MMcf/d) of Cabot's natural
gas production. Construction will begin on the additional
expansions to the Springville
system and other new areas in 2011.
Williams Partners plans to fund the total of the $150 million purchase price of the Cabot midstream assets and the subsequent
capital projects with cash on hand, borrowings from its credit
facility and/or capital market transactions. The $150 million for the purchase of Cabot's midstream assets and the additional
$150 million for expansions in 2011
were not included in previous capital expenditure guidance.
About Williams Partners L.P. (NYSE: WPZ)
Williams Partners L.P. is a leading diversified master limited
partnership focused on natural gas transportation; gathering,
treating, and processing; storage; natural gas liquid (NGL)
fractionation; and oil transportation. The partnership owns
interests in three major interstate natural gas pipelines that,
combined, deliver 12 percent of the natural gas consumed in
the United States. The
partnership's gathering and processing assets include large-scale
operations in the U.S. Rocky Mountains and both onshore and
offshore along the Gulf of Mexico.
Williams (NYSE: WMB) owns approximately 77 percent of Williams
Partners, including the general-partner interest. More information
is available at www.williamslp.com. Go to
http://www.b2i.us/irpass.asp?BzID=1296&to=ea&s=0 or
http://www.b2i.us/irpass.asp?BzID=630&to=ea&s=0 to join our
email list.
Portions of this document may constitute "forward-looking
statements" as defined by federal law. Although the partnership
believes any such statements are based on reasonable assumptions,
there is no assurance that actual outcomes will not be materially
different. Any such statements are made in reliance on the "safe
harbor" protections provided under the Private Securities Reform
Act of 1995. Additional information about issues that could lead to
material changes in performance is contained in the partnership's
annual reports filed with the Securities and Exchange
Commission.
MEDIA CONTACT:
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INVESTOR CONTACT:
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Jeff Pounds
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Sharna Reingold
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(918) 573-3332
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(918) 573-2078
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SOURCE Williams Partners L.P.