Williams Partners LP said Monday that it has agreed to sell 100% of its membership interest in Williams Olefins LLC, which owns an 88.46% undivided ownership interest in the Geismar, Louisiana, olefins plant and associated complex, to NOVA Chemicals for $2.1 billion in cash.
Additionally, upon closing of the transaction, Williams Partners subsidiaries will enter into long-term supply and transportation agreements with NOVA Chemicals to provide feedstock to the Geismar olefins plant via Williams Partners’ Bayou Ethane pipeline system in the U.S. Gulf Coast. These agreements secure a meaningful long-term fee-based revenue stream for the partnership.
The partnership said that it plans to use the cash proceeds from the Williams Olefins transaction to pay off its $850 million term loan and to fund a portion of the capital and investment expenditures that are a part of the partnership’s extensive growth portfolio. Williams expects that for federal tax purposes, any taxable gain generated from the transaction will be sheltered by its net operating loss carry-forwards.