Williams Retail Assets on the Block
TULSA, Okla. -- The Williams Cos. Inc. yesterday announced plans to sell its refineries in Memphis, Tenn., and Alaska refineries and related petroleum assets for an estimated $1 billion. The company expects to have a deal in place by the end of the year.
"This represents great potential for Williams to take another major step toward achieving our previously announced plan to significantly enhance our financial strength and flexibility," Steve Malcolm, chairman, president and CEO of Williams said in a statement. "Because of their unique nature, these assets provide an opportunity to move quickly and at a scale that would allow very significant progress toward creating a solid financial foundation for the future."
Malcolm said that while the businesses have performed well, "they are niche refineries that we believe would be of much greater value to companies whose core business is refining."
Williams' announcement came in response to increasing industry interest in its refining assets in light of the company's previous announcements that it plans to sell approximately $3 billion in assets. Asset sales are part of the energy company's overall plan to create $8 billion in improvements in the company's finances over the next year.
Williams said it has received numerous inquiries for the refineries and the convenience stores, but declined to name any companies. Among the possible suitors whose expansion plans have included acquisitions in Williams' marketing areas are Israeli oil companies Alon USA and Delek Group.
"We've received numerous expressions of interest and one unsolicited offer to purchase our refining and marketing businesses in Tennessee and Alaska," said Phil Wright, president and CEO of Williams' energy services unit. "These are two unique refining and marketing enterprises that have consistently delivered solid performance for Williams."
Wright said the Memphis businesses made attractive profits during the first quarter of this year while many other refiners in the lower 48 states reported losses. "This clearly demonstrates the advantageous position we've developed there," he said.
Williams plans to offer for sale its Alaska refinery, two associated petroleum products terminals, 29 convenience stores and its 3-percent stake of the Trans Alaska Pipeline System. In Memphis, Williams intends to offer for sale its refinery and the associated West Memphis, Ark., terminal, the pipeline connecting the refinery to the terminal and the Collierville, Tenn., crude terminal.
With a processing capacity of 220,000 barrels a day, Williams' Alaska refinery designates about 60 percent of its production to jet fuel for airlines and the U.S. military. The remaining 40 percent of its production goes to produce gasoline and diesel fuel
The network of Williams' Express convenience stores in Alaska sells gasoline and diesel produced at the refinery from crude oil transported on the Trans Alaska Pipeline.
Williams' Memphis refinery, with a capacity of 190,000 barrels per day, produces gasoline, diesel and propane. The Memphis refinery processes a variety of crude oils that are delivered via the Capline pipeline from the Louisiana Gulf Coast. The Memphis assets include one of the nation's busiest truck racks in North America. A petroleum products pipeline linking the Memphis refinery to the company's West Memphis, Ark., terminal was placed in service Sept. 2001.
Williams has retained Lehman Brothers as an advisor to assist in the sale process, which it expects to begin immediately.
"This represents great potential for Williams to take another major step toward achieving our previously announced plan to significantly enhance our financial strength and flexibility," Steve Malcolm, chairman, president and CEO of Williams said in a statement. "Because of their unique nature, these assets provide an opportunity to move quickly and at a scale that would allow very significant progress toward creating a solid financial foundation for the future."
Malcolm said that while the businesses have performed well, "they are niche refineries that we believe would be of much greater value to companies whose core business is refining."
Williams' announcement came in response to increasing industry interest in its refining assets in light of the company's previous announcements that it plans to sell approximately $3 billion in assets. Asset sales are part of the energy company's overall plan to create $8 billion in improvements in the company's finances over the next year.
Williams said it has received numerous inquiries for the refineries and the convenience stores, but declined to name any companies. Among the possible suitors whose expansion plans have included acquisitions in Williams' marketing areas are Israeli oil companies Alon USA and Delek Group.
"We've received numerous expressions of interest and one unsolicited offer to purchase our refining and marketing businesses in Tennessee and Alaska," said Phil Wright, president and CEO of Williams' energy services unit. "These are two unique refining and marketing enterprises that have consistently delivered solid performance for Williams."
Wright said the Memphis businesses made attractive profits during the first quarter of this year while many other refiners in the lower 48 states reported losses. "This clearly demonstrates the advantageous position we've developed there," he said.
Williams plans to offer for sale its Alaska refinery, two associated petroleum products terminals, 29 convenience stores and its 3-percent stake of the Trans Alaska Pipeline System. In Memphis, Williams intends to offer for sale its refinery and the associated West Memphis, Ark., terminal, the pipeline connecting the refinery to the terminal and the Collierville, Tenn., crude terminal.
With a processing capacity of 220,000 barrels a day, Williams' Alaska refinery designates about 60 percent of its production to jet fuel for airlines and the U.S. military. The remaining 40 percent of its production goes to produce gasoline and diesel fuel
The network of Williams' Express convenience stores in Alaska sells gasoline and diesel produced at the refinery from crude oil transported on the Trans Alaska Pipeline.
Williams' Memphis refinery, with a capacity of 190,000 barrels per day, produces gasoline, diesel and propane. The Memphis refinery processes a variety of crude oils that are delivered via the Capline pipeline from the Louisiana Gulf Coast. The Memphis assets include one of the nation's busiest truck racks in North America. A petroleum products pipeline linking the Memphis refinery to the company's West Memphis, Ark., terminal was placed in service Sept. 2001.
Williams has retained Lehman Brothers as an advisor to assist in the sale process, which it expects to begin immediately.