Year of the Tiger

Those of you who are familiar with the Chinese Zodiac may already know that 2010 is the Year of the Tiger. Actually, it starts on February 14, 2010, and ends on February 2, 2011. Those of you unfamiliar might be asking: “What is the year of the Tiger, and what (if anything) does it mean to me?” Well, according to the projections, the Year of the Tiger is “traditionally associated with massive changes and social upheaval. Therefore, 2010 is very likely to be a volatile one both on the world scene, as well as on a personal level.” Ugh. Not what we needed to hear after a tumultuous 2009.

But the predictive analysis continues: “Stability is out of the question, and one social cataclysm precedes the other. The problem is that the desire for action can outpace the conditions for positive change – though it doesn’t mean that you should sit on your hands. Businessmen in the Year of the Tiger should remember the proverb ‘measure thrice and cut once.’” Well, that’s useful guidance for any time. Interestingly, the analysis concludes with these thoughts: “Remember, whatever the omens portend, for better or worse, you are the final master of your own fate.” Something to keep in mind in the Year of the Tiger. 

Williams announces restructuring. Maybe it’s a sign of the changes to come in the Year of the Tiger. Williams Cos. has announced a major restructuring, and says it plans to merge two affiliated partnerships and sell them most of its pipeline assets. The goal is to cut debt as exploration spending climbs. Williams Partners LP, the surviving partnership, will pay $3.5 billion in cash for assets including the Transcontinental Gas Pipe Line, and stakes in the Northwest Pipeline and the Gulfstream Pipeline to Florida. The affiliate will assume $2 billion of pipeline debt and issue 203 million units, representing an 80% stake, to Williams. The transaction will make Williams, whose founding brothers started building pipelines in 1908, more focused on natural gas production. That business grew from 16% of earnings in 2004 to between 36 and 45% the following four years as production and prices rose. But, ask any pipeliner who has been in the business a while – such corporate shuffling is probably old hat to them.

Denali to invite shipper bids in April. Officials with Denali–The Alaska Gas Pipeline LLC say they will invite bids from companies interested in shipping Alaskan natural gas to Canada and Lower 48 markets in April. The open season will last until at least October, an extended period of time that will allow the project developers BP and Conoco-Phillips to understand shipper needs and to consider the next steps. The Denali pipeline may span 2,000 miles from the North Slope to Alberta, and possibly extend for another 1,500 miles to reach U.S. markets. Denali officials say that the company has invested $130 million on project studies in the past 20 months. Maybe positive news on the Alaskan gas pipeline front will be a welcome change in the Year of the Tiger.

Major ethanol pipeline proposed. Here’s an interesting project proposal. The largest U.S. ethanol producer, Poet, and Magellan Midstream Partners, L.P. have formed a joint venture to assess the feasibility of building an 1,800-mile pipeline that would carry ethanol from production facilities in Davison County, South Dakota, to Linden, New Jersey. The developers say that a loan guarantee from the U.S. Department of Energy is needed for the project to become a reality. Congress is considering amendments to DOE’s loan guarantee program to include large-scale renewable fuel pipeline projects. Even if the project is deemed feasible, it won’t start construction in the Year of the Tiger – early plans call for a 2014 completion date. The companies say the pipeline would be an economic boost for the United States, creating almost 80,000 direct, indirect and induced jobs across the country, including approximately 1,100 permanent jobs after construction is complete. n