Oklahoma-based Williams has signed a definitive agreement to sell its Central natural gas pipeline to Southern Star Central for $380 million in cash and an assumption of $175 million in debt. The purchaser is a corporation owned by AIG Highstar Capital.
The 6,000-mile Central Pipeline, with headquarters in Owensboro, KY, transports natural gas from Kansas, Oklahoma, Texas, Wyoming and Colorado to markets in the Midwest.
The system’s design capacity is 2.3 billion cubic feet per day, with an annual throughput of 337.5 trillion British thermal units. Approximately 450 employees support the pipeline system.
Williams said it expects the sale of Central to reduce its capital expenditure requirements by approximately $50 million over the next 16 months. The company also plans to recognise a pre-tax loss of approximately $90 to $95 million from the sale in the third-quarter.
The sale is expected to close within 60 days, subject to completion of Hart-Scott-Rodino review.