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Williams to sell interest in Geismar olefins plant to NOVA

HOUSTON, April 17, 2017 (PCW) – Williams Partners LP has agreed to sell its interest in Williams Olefins LLC, which owns an 88.46% share of the company's Geismar, Louisiana, olefins plant and associated complex, to NOVA Chemicals for $2.1 billion cash. The transaction is expected to close in summer 2017. Upon closing of the transaction, Williams will enter into long-term supply and transportation agreements with NOVA to provide feedstock to the olefins plant via its Bayou Ethane pipeline system.

The olefins plant has an annual ethylene capacity of 2.06 billion lbs/yr and has been a part of the Williams asset portfolio since 1999.

The Geismar asset will be NOVA's first in the US Gulf. NOVA's current North American olefins asset portfolio is exclusively based in Canada. It includes one steam cracker in Sarnia (ethylene capacity: 1.85 billion lbs/yr) and three steam crackers in Alberta (combined ethylene capacity 6.2 billion lbs/yr).

In March, NOVA announced that in a joint venture partnership with Total and Borealis, it will build a new steam cracker in Port Arthur, Texas (ethylene capacity: 2.2 billion lbs/yr), along with a 1.35 billion lbs/yr PE plant in Bayport, Texas. The JV would also take ownership of Total’s existing 880 million lbs/yr PE plant at Bayport. A final decision on the JV investment is expected in late 2017. If approved, the new plants are expected to start up in late 2020.

Williams Partners said it will use the cash from the Geismar sale to pay off its $850 million term loan and to fund capital and investment expenditures. Morgan Stanley was the financial adviser to Williams Partners on the transaction.

SABIC Petrochemical Holdings US, Inc. will retain its existing 11.54% ownership stake in the olefins unit.     -- Kathy Hall

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