Summary
The Williams Companies, Inc. (WMB) filed an 8-K on May 8, 2006, to report a significant joint venture initiative. One of Williams' units has entered into an agreement with an affiliate of ONEOK, Inc. to develop the Overland Pass Pipeline. This new pipeline is designed to transport natural gas liquids (NGL) from southwestern Wyoming production areas to central Kansas, a crucial step in expanding Williams' NGL infrastructure. While ONEOK's affiliate, Northern Border Partners, L.P., will initially hold a 99% stake and manage the project, Williams retains a 1% interest with the option to increase its ownership to 50% and assume operational control within two years of the pipeline's commencement. This strategic move secures long-term transport for Williams' equity NGL volumes and provides access to major demand hubs like Mont Belvieu, Texas. The transaction is subject to board approval.
Key Highlights
- 1Williams Companies (WMB) and an affiliate of ONEOK, Inc. are forming a joint venture to develop the Overland Pass Pipeline.
- 2The Overland Pass Pipeline will transport natural gas liquids (NGL) from Wyoming to central Kansas.
- 3ONEOK's affiliate, Northern Border Partners, L.P., will initially own 99% and manage the project's construction and operation.
- 4Williams retains a 1% stake with an option to increase its ownership to 50% and become the operator within two years of the pipeline becoming operational.
- 5The pipeline is tentatively scheduled for start-up in early 2008.
- 6Williams has committed its equity NGL volumes from two Wyoming plants to the new pipeline via a long-term shipping agreement.
- 7The joint venture will provide Williams access to downstream NGL services and the Mont Belvieu, Texas demand hub.