Williams Partners Buys Caiman Eastern Midstream (USA)

Williams Partners said it has agreed to acquire Caiman Energy’s wholly owned subsidiary, Caiman Eastern Midstream, for approximately $2.5 billion.

Williams Partners said in a statement it expects significant growth in gathering volumes and NGL production from these assets. There is an estimated 300 trillion cubic feet (Tcfe) of natural gas in place within a 35-mile radius of the system, and a significant amount remains undedicated.

The partnership expects the Caiman system to gather more than 2 billion cubic feet per day (Bcf/d) and produce approximately 300,000 barrels per day (bbl/d) of NGLs and condensate by 2020. It expects the acquisition to be accretive to projected distributable cash flow attributable to partnership operations per LP unit by 2013, with substantial projected growth thereafter.

“These new assets, anchored by long-term agreements with a diverse set of customers, give us a major presence in the liquids-rich portion of the Marcellus Shale,” said Alan Armstrong, chief executive officer of Williams Partners’ general partner. “We expect significant long-term growth potential because the liquids-rich gas makes this area the most economical and top-performing play for producers in North America.

“It’s also just adjacent to the rich gas and oil-producing portions of the Utica Shale, where we’re planning on developing new infrastructure with Caiman. Our goal is to be the leading gathering, processing and transportation solution provider for producers in the Marcellus Shale.

“We’re putting together the kind of infrastructure that makes drilling in the Marcellus even more desirable for producers because we provide large-scale infrastructure solutions that connect producers’ natural gas and natural gas liquids to the best markets.”

Jack Lafield, president and CEO of Caiman Energy, said:

“We’re pleased that this transaction will achieve a strong return for our investors at EnCap and Highstar Capital. We’re very proud of the sizable rich gas system we’ve built in the Marcellus and the great relationships Caiman has developed with producers and the people of West Virginia. The Williams name is synonymous with excellence and superior customer service. We’re excited to turn over our gathering and processing assets to the Williams team. Williams has a unique ability to build on the value we’ve created in the Marcellus. They will serve our customers and the people of West Virginia with distinction.

“Today also marks the beginning of an exciting new alliance with Williams Partners,” Lafield said. “We’re looking forward to working with Williams in the Utica Shale to bring midstream infrastructure to Ohio for producers working in this dynamic and rapidly evolving play. When you combine our management team and the expertise of both our companies in gas gathering, processing and NGLs, with our shared commitment to community and customer-focused solutions, it’s clear that Caiman and Williams are a powerful team.”

[mappress]
LNG World News Staff, March 20, 2012