Boardwalk Pipeline to Invest $850 Million in Capex for 2016

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Researched by Industrial Info Resources (Sugar Land, Texas)--Boardwalk Pipeline Partners (NYSE:BWP) (Houston, Texas) plans to nearly double its capital expenditures this year from 2015 as several growth projects move forward, executives said Monday. Reported fourth-quarter 2015 earnings for the midstream natural gas and natural gas liquids (NGL) transportation, processing and storage partnership rose 78% to $65.6 million in comparison with the same quarter in 2014.

Chief Financial Officer Jamie Buskill said during the Monday earnings conference call that the partnership invested $375 million in capital expenditures in 2015, including $232 million in growth capital, and $143 million in maintenance capital. He said that for 2016, the partnership is forecasting a total capital program of $850 million, consisting of $720 million of growth capital, and $130 million maintenance capital.

Industrial Info is tracking 23 active Boardwalk Pipeline projects worth $786.20 million, including the $50 million conversion of an underground natural gas storage cavern in Plaquemine, Louisiana. Choctaw Cavern No. 24, which has a capacity of 6.67 billion cubic feet, will be overhauled for the storage of NGL. The project is expected to kick off in the second quarter of 2016.

The partnership operates about 14,625 miles of pipelines, and underground storage caverns with an aggregate working gas capacity of about 208 billion cubic feet, and liquids capacity of 18 million barrels. Its pipeline system runs from the Gulf Coast through the upper Midwest and Great Lakes.

Fourth-quarter 2015 revenues rose 7.3% to $326.8 million from $304.6 million in fourth-quarter 2014. For all of fiscal year 2015, the partnership reported $222 million in net income, down 5% from $233.6 million in 2014. Revenues for 2015 totaled nearly $1.25 billion, up 1.6% from $1.23 billion in 2014.

Buskill said the fourth quarter was exceptionally warm, and as a result, fourth-quarter natural gas transport volumes were down about 6.5% from a year earlier. However the transport of liquids in that period rose 55% to 14 million barrels, largely driven by the return to service of the Evangeline pipeline, which had been down for repairs. The 176-mile ethylene pipeline system, which has the capacity to transport about 2.6 billion pounds of ethylene per year between Port Neches, Texas and Baton Rouge, Louisiana, became part of Boardwalk in fourth-quarter 2014 following its acquisition of Chevron Petrochemical Pipeline LLC from Chevron Pipe Line Company, a subsidiary of Chevron (NYSE:CVX) (San Ramon, California).

Chief Executive Officer Stan Horton outlined several projects that are in various stages of development.

The Ohio to Louisiana Access project, which will move natural gas from the Utica/Marcellus shale region to the Gulf Coast, is under construction and expected to go into service in the second quarter of this year, Horton said. Also, lateral natural gas pipeline projects in Indiana and Kentucky are expected to go into service in the later part of 2016.

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