Williams to pay $750M for Laser pipeline

BY DAVE FALCHEK

Times-Shamrock Writer

The parent company of Laser Northeast Gathering System has agreed to sell itself to pipeline giant Williams Partners in a $750 million deal, giving one of the nation’s largest pipeline companies a greater foothold in the Marcellus Shale region.

The deal includes Delphi Midstream Partners’ 33-mile Laser system – predominantly inSusquehannaCounty- and a smaller system inTexas.

Laser Chief Executive Officer Thomas Karam, a native ofScranton, said he knew the complex and capital-intensive pipeline business would eventually require him to take Laser public or find a suitor.

The well-respected and well-financed Williams will be a responsible steward of the system and expand it, he said, helping create jobs and economic opportunity.

“Our customers and our employees will be best served by Williams, which is one of the best and most financially stable pipeline companies,” he said. “Williams has high-quality people and the same corporate values of integrity and construction practices that we have.”

Karam said Laser’s 33 employees inPennsylvaniawill be offered jobs with Williams.

The deal includes Laser’s long-term gathering agreements and expansion plans. When all phases are complete, Laser’s system will be 75 miles and have a capacity of 1.3 billion cubic feet per day (bcf/d). The pipeline costs an estimated $55 million to build.

Williams already has a presence in the area. The company is nearing completion of the 33.5-mile Springville Gathering System, which runs from Susquehanna and Wyoming counties to Dallas Twp. Williams Exploration & Production is also active in the Marcellus Shale, but that unit is expected to be spun off by the partnership next year.

This is the second major pipeline deal announced for the region this year. In October, Kinder Morgan announced it would purchase El Paso Corp., whose subsidiary Tennessee Gas Pipeline Co., operates a 30-inch pipeline known as the “300 Line,” which, after expansion will have a capacity of 1.5 bcf/d. Tennessee also plans to upgrade an existing line that goes through Pike and Susquehanna Counties to increase the volume of gas deliveries to customers in New Jersey and New York City metropolitan area.

Karam, who is former chief operating officer for Southern Union Corp., said he plans to look for other business opportunities related to the growing Marcellus Shale industry. During his time atSouthern Union, natural gas prices reached record highs, and the company operated a liquefied natural gas terminal which imported natural gas from other countries – a practice unnecessary today after the exploitation of shale gas reserves around the country and record low natural gas prices.

“As a region, we have to ensure we make the investment and install the infrastructure to develop this industry in an environmental responsible manner. It can be done. We can’t shut the industry out,” he said. “We are sitting at the epicenter of something that will change our country’s energy and national security landscape.”