Williams Partners and Access Midstream eye $6 billion merger

2014-06-18T08:00:00Z Williams Partners and Access Midstream eye $6 billion mergerBy BENJAMIN STORROW Casper Star-Tribune The Billings Gazette

Williams Partners LP is poised for a $6 billion merger with Access Midstream Partners LP, in a deal with potentially important implications for Wyoming.

The merger of the two natural gas delivery companies, which still has to be approved by each firm’s board of directors, was the latest evidence of Wyoming’s shifting energy landscape.

Williams has long been active in western Wyoming’s gas fields, while Access Midstream is one of the companies developing infrastructure aimed at supporting the development of the Niobrara shale formation in the eastern part of the state.

Need for infrastructure

Oil is the main object of the Niobrara play, but natural gas is a byproduct of that production. Currently, there is limited infrastructure in the region to capture that gas, prompting some companies there to flare off the excess gas. The practice has drawn criticism from some landowners in the area.

Access Midstream, alongside Crestwood Midstream, is building a new natural gas plant in Douglas. The facility will be capable of processing 120 million cubic feet of gas daily. It has drawn criticism during permitting from some Douglas residents worried about its impact on local air quality.

Officials from both companies said it was too early to say what impact, if any, the merger would have on that facility.

Wyoming impact

The companies will look to integrate their operations in the northeast, where geographic proximity of existing assets makes the combination feasible, Williams CEO Alan Armstrong said during a Monday call with financial analysts. That type of integration will be more difficult in Wyoming, where the distance between Williams’ assets and Access Midstream’s is greater.

Still, Access Midstream’s Wyoming operations are an attractive piece of a potential merger, said Williams spokesman Tom Droege.

“The natural gas gathering and processing assets owned by Access Midstream Partners across North America’s growth basins, including the Niobrara in Wyoming, clearly provide an excellent complement to our existing assets,” Droege said. “Our announced acquisition of ACMP is expected to further enhance our presence in Wyoming and other attractive growth basins throughout the country.”

Williams is perhaps best known in the Cowboy State for its ownership of the natural gas processing facility in Opal. The facility, which serves as a key cog in the delivery of natural gas from the Jonah and Pinedale fields to consumers on the West Coast, caught on fire in April and was temporarily closed. Williams has over 3,500 miles of pipeline in Wyoming.

The merger is expected to be completed in the third quarter of this year.

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