Energy Company to Merge Two Affiliates to Create Big Natural-Gas Partnership
By JEFFREY MCCRACKEN And ANN DAVIS

Energy provider Williams Cos. is restructuring its operations to merge two of its natural gas pipeline and energy-processing affiliates to create one of the largest natural-gas partnerships in the country, with operations across the Gulf Coast, Rocky Mountains and into the northeast, said people familiar with the matter.

The deal will provide Williams about $3.5 billion in cash to pay down debt while also giving it a substantial stake in the combined business, said these people. In exchange, Williams will contribute pipeline and production assets it has in a host of businesses, including its Texas Transcontinental pipeline, which runs from the Gulf Coast and up through the natural-gas rich Marcellus shale region of Pennsylvania, where the need for gas-transport networks is rising. That pipeline provides about half of the natural gas to New York City.

The move will merge Williams Partners and Williams Pipeline Partners, which are entities called master limited partnerships. MLPs are tax-advantaged vehicles commonly used in the energy industry to own stable, fee-producing infrastructure assets such as pipelines and energy-processing plants.

The merged MLP, to be called Williams Partners, will be the third-largest such business, behind Kinder Morgan Energy Partners and Enterprise Products Partners, by estimated earnings.

Here's the WSJ Article.
http://online.wsj.com/article/SB10001424052748703626604575011503466...