An energy infrastructure company that owns a natural-gas pipeline in the midstate and has plans to build at least one other has agreed to pay almost $6 billion for Access Midstream Partners LP.
Williams Cos. has agreed to acquire the 50 percent general partner interest and 55.1 million limited partner units in the Oklahoma City-based Access held by Global Infrastructure Partners, according to a news release from the company.
“Today, we’re announcing a series of steps designed to amplify the benefits of our existing relationship with Access Midstream Partners, an increase in our dividend and the acceleration of Williams’ move to a pure-play GP holding company of two leading master limited partnerships,” Alan Armstrong, Williams’ chief executive officer, said in the release.
At the close of trading on Friday, the 55.1 million limited partner units had a market value of $3.6 billion, according to the release. Upon closing, Williams will own 100 percent of the general partner and 50 percent of the limited partner interests in Access Midstream Partners. This transaction follows Williams’ acquisition of its 50 percent general partner interest and 23 percent LP interest in Access in December 2012, according to the release.
Williams expects the acquisition to close in the third quarter. Following the closing of the acquisition, Williams plans to increase its third-quarter dividend by 32 percent to 56 cents per share.
Williams also said it plans to merge Williams Partners LP with and into Access Midstream Partners.
“The proposed merger of Williams Partners and Access Midstream Partners, if consummated, would create an industry-leading, large-scale MLP with substantial positions across the midstream business — spanning natural gas gathering and processing, natural gas transmission pipelines, and NGL and (petrol-chemical) services. Our positions in these businesses provide clearly identified growth for the foreseeable future,” Armstrong said.
Access’ growth is driven by expected production increases in its portfolio of more than 8.3 million acres under dedication in major shale and unconventional producing areas, including the Marcellus and Utica shales, among others, according to the release.
Williams Partners owns the Transco Pipeline, a 10,000-mile natural-gas pipeline system that extends from the Gulf of Mexico to the New York City metropolitan area. The system serves customers in Texas plus 12 Southeast and Atlantic seaboard states, including major metropolitan areas in Georgia, North Carolina, Washington, D.C., New York, New Jersey and Pennsylvania, according to the company’s website. Part of the line runs through Lancaster and York counties.
Williams wants to expand the capacity of the Transco through the Atlantic Sunrise project, a proposed 178-mile pipeline that would run from Northeast Pennsylvania to the Transco in Lancaster County. The line also would go through Lebanon County.