Largest Natural Gas Partnership
January 23, 2010
Williams Cos. announced on Tuesday, January 19 that by combining its pipeline and processing units it will created one of the largest natural gas partnerships in the United States. The deal will provide Williams Cos. with more money to continue exploring for natural gas. All across the nation energy companies are doing what they can to get their hands on a bigger portion of the gigantic natural gas reserves in the United States that have been discovered recently because of drilling technology advancements.
The deal is estimated to be worth close to $10 billion plus $2 billion in debt. Williams Cos., the Tulsa Oklahoma based company will receive around $3.5 billion in cash from Williams Partners, its natural gas processing company. Along with this, the company will receive 203 million units of the partnership as well as its stake from 24 percent to 80 percent.
This restructure will give the company the ability to borrow money easier. Williams Cos. is among the biggest natural gas operations in the nation, produces enough gas for over four million homes per day, and transports close to 12% of America’s daily supply. Among its assets is the Texas Transcontinental Gas pipeline.
This pipeline carries gas from the Gulf Coast to New Jersey and New York City as well as the other locations in the Northwest. Williams Cos. shares rose $1.73, or 8.1 percent, to close at $23.10. Earlier prior to this announcement, shares reached a 52-week high of $23.76. Williams Partners shares sky rocketed up $5.60, or 18.2 percent, to $36.39, and hit a 52-week high of $36.40. Williams Pipeline Partners shares gained $3.84, or 16.5 percent, at $27.19. The shares hit $27.25 during the session, their highest price over the past year.
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