TULSA, Okla. — Williams Cos., one of the nation’s largest producers of natural gas, said Tuesday that it will create one of the biggest natural-gas partnerships in the nation by combining its pipeline and processing units.
The deal, valued at about $10 billion plus $2 billion in debt, is the latest in an industry trying to capitalize on the increasing role of natural gas in powering U.S. homes and businesses.
Williams, based in Tulsa, is the largest natural-gas producer in the Piceance Basin of western Colorado.
The company will get about $3.5 billion in cash from Williams Partners, its midstream natural-gas processing company, to pay down debt. Williams also is offering to purchase up to $3 billion of its debt in a cash tender offer.
A key asset Williams brings to the partnership is the Texas Transcontinental Gas pipeline, which runs to Pennsylvania’s rich Marcellus Shale. It carries gas from the Gulf Coast through Southern and mid-Atlantic states to New Jersey and New York City.
In a conference call with analysts, Williams chief executive Steve Malcolm said the goal is to create a simpler company with greater access to capital that can be used for exploring and producing gas, including the Piceance Basin that Williams executives believe could be as productive as any of the major shale developments in the U.S.
“We know exactly how we’re going to grow,” he said.
The new, larger Williams Partners comes as many energy companies are angling for a piece of the rapidly growing natural-gas market.
Two weeks ago, Chesapeake Energy said it was taking on French oil company Total as a partner to help develop deep fields in Texas. Last month, Exxon Mobil said it will buy XTO Energy in a deal valued at $31 billion.
Much of the focus in the deals is the huge gas reserves the U.S. has. Energy companies have rushed in as estimates of supplies have grown sharply.
