Williams Completes Formation of US$3.8 Billion Strategic Joint Venture Partnership with Canada Pension Plan Investment Board ...
June 17 2019 - 8:15AM
Business Wire
- Strategic partnership between Williams
and CPPIB supports ongoing growth and Northeast region
optimization
- Williams receives approximately $1.33
billion in exchange for a 35% interest in a combined Utica East
Ohio Midstream-Ohio Valley Midstream joint venture
Williams (NYSE: WMB) today announced the completion of the
formation of a US$3.8 billion joint venture with Canada Pension
Plan Investment Board (“CPPIB”) that includes Williams’ owned and
operated Ohio Valley Midstream system (“OVM”) in the western
Marcellus and Williams’ owned and operated Utica East Ohio
Midstream system (“UEO”) in the Utica Shale play in eastern
Ohio.
The finalization of this joint venture agreement in the
Northeast, announced in March 2019, includes the completion of
CPPIB’s investment of approximately $1.33 billion (subject to
certain agreed-to, post-closing adjustments) for a 35% ownership
stake in this long-term partnership. Williams retains 65%
ownership, operates the combined business, and will consolidate the
financial results of the joint venture in Williams’ financial
statements.
The cash proceeds to Williams from the purchase by CPPIB of its
stake in the joint venture are being used to offset the purchase
price of Williams’ previously announced and completed acquisition
of the remaining 38% ownership interest in UEO from Momentum
Midstream, with the balance of proceeds used for debt reduction and
to fund Williams’ extensive portfolio of attractive growth
capital.
Williams expects synergies through common ownership by combining
UEO and OVM to create a more efficient platform for capital
spending in the region, resulting in reduced operating and
maintenance expenses and creating enhanced capabilities and
benefits for producers in the area.
“Closing this transaction is another significant milestone in
enhancing our position in the Northeast and accelerating ongoing
strengthening of our balance sheet,” said Alan Armstrong, president
and chief executive officer of Williams. “We now turn our focus to
hitting the ground running with our new partner CPPIB, and look
forward to growing our partnership and together, realizing the
shared benefits of the combining of assets in the basin.”
The joint venture excludes Williams’ ownership interests in
Flint Gathering, Cardinal Gathering, Marcellus South Gathering,
Laurel Mountain Midstream and Blue Racer Midstream.
Morgan Stanley and CIBC Capital Markets acted as financial
advisers to Williams for the transaction. Gibson Dunn served as
legal counsel to Williams.
About Williams
Williams (NYSE: WMB) is a premier provider of large-scale
infrastructure connecting U.S. natural gas and natural gas products
to growing demand for cleaner fuel and feedstocks. Headquartered in
Tulsa, Oklahoma, Williams is an industry-leading, investment grade
C-Corp with operations across the natural gas value chain including
gathering, processing, interstate transportation and storage of
natural gas and natural gas liquids. With major positions in top
U.S. supply basins, Williams owns and operates more than 30,000
miles of pipelines system wide – including Transco, the nation’s
largest volume and fastest growing pipeline – providing natural gas
for clean-power generation, heating and industrial use. Williams’
operations handle approximately 30% of U.S. natural gas.
www.williams.com
Portions of this document may constitute “forward-looking
statements” as defined by federal law. Although the company
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 company’s
annual and quarterly reports filed with the Securities and Exchange
Commission.
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