Boardwalk Pipeline Partners Sees Stronger Revenues in Second-Quarter 2013, Expects $260 Million Growth Capex for Year

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Researched by Industrial Info Resources (Sugar Land, Texas)--Boardwalk Pipeline Partners LP (NYSE:BWP) (Houston, Texas), a midstream master limited partnership that services the natural gas and liquids markets, reported stronger overall results in the second quarter of 2013, as revenues strengthened from improved prices and business at the company's new midstream business in Louisiana. Net income was reported to be $70.5 million, an 8.29% increase from second-quarter 2012.

Total operating revenues stood at $288.7 million, a 4.68% increase from the same period last year. Higher natural gas prices led to stronger revenues from fuel, although fuel expenses also increased. The company also benefited from its October 2012 acquisition of Boardwalk Louisiana Partners LLC and a $17 million gain from the sale of storage base gas. However, these gains were offset partially by weaker transportation revenues, largely due to contract renewals, and unfavorable market conditions, such as mild weather, which weakened utilization.

Capital expenditures for 2013 so far total about $120.4 million for growth projects and $21.8 million for maintenance projects. By comparison, growth project expenditures for all of 2012 totaled just $147.1 million.

Industrial Info is tracking $315 million in active projects involving Boardwalk, including the $25 million addition of a natural gas storage cavern in Petal, Mississippi. The project involves constructing the No. 12 salt cavern to add 5 billion cubic feet of working gas to the existing natural gas storage site bringing the total capacity to 41 billion cubic feet. Boardwalk has completed the leaching of the salt dome cavern expansion, and soon will begin injecting the base gas into the cavern. The working gas capacity at Petal, including the expansion, is fully contracted. The plant is owned by Petal Gas Storage LLC (formerly Boardwalk HP Storage), a subsidiary of Boardwalk Pipeline Partners.

"In the second quarter, we continued to make progress on executing our growth strategy," said Stanley Horton, the president, director and chief executive officer of Boardwalk, in a conference call. "On May 28, we announced that we had formalized our joint venture with Williams Companies (NYSE:WMB) to continue the development of the Bluegrass Pipeline, and related fractionation and storage assets, including a potential new liquefied petroleum gas (LPG) terminal.

"The Bluegrass Pipeline is designed to transport Marcellus- and Utica-mixed natural gas liquids (NGL) production to growing petrochemical markets in the U.S. Gulf Coast. The pipeline is proposed to be connected to a new NGL fractionation facility named the Moss Lake Fractionation, which would be constructed at our Sulphur Hub in the Lake Charles area, as well as a new NGL storage facility. We're also discussing development of a new LPG export terminal that would be named the Moss Lake LPG terminal."

In Texas, as part of its South Texas Eagle Ford Expansion, Boardwalk recently began operations at a facility that will expand its gathering and processing capacity for liquids-rich gas produced in the Eagle Ford Shale. For more information, see May 17, 2013, article - Boardwalk Pipeline Partners Wrapping Up Texas Natural Gas Projects.

"In 2013, we estimate that Boardwalk's capital expenditures in relation to Bluegrass will total approximately $11 million," said Jamie Buskill, the chief financial officer of Boardwalk, in the conference call. "We anticipate growth capital expenditures related to previously announced projects, including our portion of Bluegrass, will be approximately $260 million in 2013... Maintenance capital expenditures are expected to be $100 million."

Boardwalk is a subsidiary of Loews Corporation (NYSE:L) (New York, New York).

For more information, visit Industrial Info's North American Oil and Gas Transmission Project Database.

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