Williams to Purchase Cove Point LNG Facility
HOUSTON--(BUSINESS WIRE)--May 3, 2000--Williams (NYSE: WMB) has announced that it has reached an agreement with Columbia Energy Group to purchase 100 percent of the partnership interests in the Cove Point LNG Limited Partnership for $150 million. The transaction between Williams and Columbia is expected to be finalized in July 2000.
"This facility is strategically located in one of the fastest growing natural gas markets in the United States," said Cuba Wadlington Jr., president and chief executive officer, Williams Gas Pipeline. "The growing demand for clean-burning natural gas, especially in the mid-Atlantic region, highlights the unique value of the Cove Point facility."
Located in Lusby, Md., the Cove Point facility is the largest LNG import facility in the United States with a send-out capacity of 1 billion cubic feet per day. The Cove Point facility has substantial untapped synergies with Williams' Transco pipeline system as well, added Wadlington. "Cove Point's 87-mile pipeline crosses our Transco system, but is not currently connected. By adding a new interconnection, the Cove Point facility will even further enhance Transco's renowned system flexibility and reliability and will create future expansion opportunities," he said.
Constructed in the mid-1970's at a cost of approximately $400 million, the Cove Point facility has operated as an LNG peak shaving facility since 1995. The facility has an LNG storage capacity of 5 billion cubic feet and a liquefaction capacity of 15 million cubic feet per day. The purchase includes 87 miles of 36-inch diameter pipe interconnected to Columbia Gas, Consolidated Natural Gas (CNG), and Washington Gas Light.
Cove Point LNG Limited Partnership held an open season for a firm LNG tanker discharging service from February 16 through March 16, 2000. The results of the open season are expected to be announced shortly. Pending approval by the Federal Energy Regulatory Commission, Cove Point LNG plans to begin the LNG tanker discharging service by late 2001 or early 2002.
Williams' gas pipeline unit is based in Houston and has offices in Salt Lake City and Owensboro, Ky. Together, its five interstate natural gas pipelines are among the nation's largest-volume transporters of natural gas, delivering approximately 16 percent of the natural gas consumed in the United States. Its 27,300-mile pipeline network stretches from coast to coast with access to every major supply basin in the country. |
