Williams Partners L.P. is to increase its ownership interest in gathering, processing, fractionation and storage assets in the Utica Shale play in eastern Ohio.
The company's subsidiary Utica Gas Services, which currently owns a 49 percent equity interest in Utica East Ohio Midstream LLC (UEO), has agreed to acquire an additional 21 percent equity interest from a subsidiary of EV Energy Partners, L.P. for approximately $575 million in cash.
This will give Williams Partners a 70 percent equity interest in UEO, a midstream business that has natural gas gathering and compression facilities, four processing plants with a total capacity of 800 MMcf per day, a 135,000 barrel per day natural gas liquids (NGL) fractionation facility, approximately 600,000 barrels of NGL storage capacity and other ancillary assets, including loading and terminal facilities.
Long-term, fee-based contracted commitments are in place for the gathering, processing, fractionation and storage assets.
"Acquiring these cash-generating assets supports our strategy to grow our natural gas midstream position in key basins," said Alan Armstrong, CEO of the general partner of Williams Partners. "This fixed-fee business will be accretive to Williams Partners beginning in 2015 and the partnership has attractive growth opportunities as the Utica continues to develop."
The other member of UEO has the right to acquire a portion of EV Energy Partners' interests in the business for the same price. If this right is exercised, Williams Partners would acquire an approximate 13 percent interest and the other member would acquire an approximate 8 percent interest.
