December 22, 2003 -- Tulsa, Oklahoma – SemGroup, L.P. (formerly The Seminole Group) and Williams (NYSE:WMB) announced today the sale of Williams’ wholesale propane assets and marketing business to SemGroup. The company will operate its new subsidiary under the name SemStream, L.P. The purchase includes seven propane terminals, software and hardware support, and long-term supply contracts providing propane deliveries to 46 states. SemGroup, a Tulsa-based, privately owned energy company is retaining the Williams employees associated with the business. Thirty-six SemStream employees are in Tulsa and 12 are located in field operations throughout the United States.
"The SemStream acquisition provides SemGroup a wonderful opportunity to diversify our domestic energy assets and represents an excellent complement to our Canadian gas marketing business," said Tom Kivisto, SemGroup president and chief executive officer. "Wholesale propane fits well with our company’s existing crude oil and gas arbitrage marketing culture. Equally important, it continues our strategy of acquiring transportation and distribution assets that expand our ability to deliver gas, fuel and crude oil supply to our end-user customers."
The propane terminals included in the sale have an annual throughput capacity in excess of 210 million gallons of propane. They are located in Arkansas, Wisconsin, Minnesota and Washington.
Kivisto commented that the addition of the SemStream employees increases SemGroup’s Tulsa payroll to approximately $8 million annually. "The SemStream employees bring with them excellent qualifications and solid reputations within the propane arena. We are pleased to add them to the more than 400 people who currently work for SemGroup in the U.S. and Canada."
Propane continues to be a growing alternative source of fuel and refrigeration, and the current domestic demand is estimated at 19.6 billion gallons annually. CHS Inc., a significant distributor meeting North America’s propane demand, is supplied through a long-term contract included in SemGroup’s acquisition. Commenting on the transaction Paul Culver, CHS senior vice president of Propane, said, "We are pleased that CHS and its network of dealers across the U.S. can continue to supply its agricultural, commercial and residential customers through this extensive and reliable distribution network."
SemGroup provides gathering, transportation, marketing and hedging services for crude oil, natural gas liquids and refined products, and natural gas producers in the United States and Canada. The privately held company is headquartered in Tulsa, Oklahoma.
CHS Inc. is a diversified energy, grains and foods company committed to providing the essential resources that enrich lives. A Fortune 500 company, CHS is owned by farmers, ranchers and cooperatives from the Great Lakes to the Pacific Northwest and from the Canadian border to Texas, along with thousands of preferred stockholders. CHS provides products and services ranging from grain marketing to food processing to meet the needs of customers around the world. It also operates petroleum refineries/pipelines and, through a broad range of working partnerships, markets and distributes Cenex® brand propane and other energy products, along with agronomic inputs and feed to rural America. CHS is listed on the NASDAQ at CHSCP.
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Director, Corporate Communications