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Williams sinks to net loss in 1Q on MLP merger termination, PDH project

HOUSTON, May 4, 2016 (PCW) -– Williams on Wednesday announced a first-quarter net loss of $65 million, compared to the $70 million profit seen in 1Q 2015.

The company said the fall-off was due to higher interest and associated costs when it ended its merger agreement with its master limited partner, $112 million of pre-tax impairment charges from equity-method investments and $34 million in “project development expenses” related to Williams’ proposed propane dehydrogenation project in Canada.

Williams noted, however, that higher olefins margins from its Geismar petrochemical plant helped to stem further income losses.

Its NGL & Petchem segment saw a net loss of $14 million in the quarter, compared to a a net loss of $5 million in 1Q 2015. The segment includes an offgas processing plant in Canada that came online during the quarter, the proposed PDH facility in Alberta and petchem pipeline projects on the Gulf Coast.

Williams Partners reported 1Q earnings of $1.06 billion, up from $917 million in 1Q 2015. The increase was driven by $60 million in higher olefins margins from a full quarter of Geismar plant production and $63 million in fee-based revenue growth.

Williams’ planned 1.2 billion lb/yr PDH plant is expected to come online at the end of 2019. A final investment decision is expected in the second half of this year.

Williams has signed an agreement with privately-held North American Polypropylene, which is an affiliate of private equity firm Goradia Capital, which will purchase 990,000 million lb/yr of PGP on a 25-year term firm fee for service basis for the production of homopolymer polypropylene. NAPP’s PP project will be located on the same site as Williams’ PDH unit. –- Samantha Hartke

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