The agreement is expected to close during the second quarter of 2013. Upon closing of the agreement, Marubeni will contribute approximately $225 million to fund capital expenditures, following with monthly capital contributions representing their 49-percent interest.
Gulfstar FPS is Williams Partners’ proprietary floating production system. The initial Gulfstar FPS, which has been under construction since late 2011, will support multiple agreements Williams Partners has signed with Hess Corporation (NYSE: HES) and Chevron (NYSE: CVX), through which production handling, export pipeline, oil and gas gathering and gas processing services are provided for the Tubular Bells field development located in the eastern deepwater Gulf of Mexico. The Gulfstar FPS will tie into Williams Partners’ wholly owned oil, gas gathering and processing systems in the eastern Gulf of Mexico. Williams Partners also expects the initial Gulfstar FPS to be capable of serving as a central host facility for other deepwater prospects in the area.
The initial Gulfstar FPS is expected to be placed into service in mid-2014. Williams Partners expects to develop additional Gulfstar FPS projects in the future.
“We’re very pleased to be following through on our goal of adding a partner to our first Gulfstar project,” said Alan Armstrong, chief executive officer of Williams Partners’ general partner. “Adding a partner like Marubeni will benefit us significantly, giving us more flexibility in capital spending as we continue to pursue attractive projects in all of our operating areas.”
Williams Partners’ expected capital spending on Gulfstar of approximately $500 million was included in the partnership’s previously issued guidance and represents a 51-percent ownership interest. The partnership expects to use consolidated accounting for the Gulfstar projects.
Gulfstar FPS is expected to have an initial capacity of 60,000 barrels of oil per day, up to 200 million cubic feet of natural gas per day (MMcf/d) and the capability to provide seawater injection services. The facility is a spar-based floating production system that utilizes traditional three-level topsides mated to a classic spar hull. This standard design approach will allow customers to reduce their cycle time from discovery to first oil.
This Gulfstar FPS is the first spar-based floating production system with major components being built entirely in the U.S. Gulf Coast area. Fabrication of the hull is taking place in Aransas Pass, Texas. The topsides fabrication will take place in Houma, La.
About Williams Partners L.P. (NYSE: WPZ)
Williams Partners L.P. is a leading diversified master limited partnership focused on natural gas transportation; gathering, treating, and processing; storage; natural gas liquid (NGL) fractionation; and oil transportation. The partnership owns interests in three major interstate natural gas pipelines that, combined, deliver 14 percent of the natural gas consumed in the United States. The partnership’s gathering and processing assets include large-scale operations in the U.S. Rocky Mountains and both onshore and offshore along the Gulf of Mexico. Williams (NYSE: WMB) owns approximately 70 percent of Williams Partners, including the general-partner interest. More information is available at www.williamslp.com, where the partnership routinely posts important information.
Portions of this document may constitute “forward-looking statements” as defined by federal law. Although the partnership believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Any such statements are made in reliance on the “safe harbor” protections provided under the Private Securities Reform Act of 1995. Additional information about issues that could lead to material changes in performance is contained in the partnership’s annual reports filed with the Securities and Exchange Commission.