Boardwalk Pipeline Parent Taking Co. Private, Dissolving MLP

We write about Boardwalk Pipeline Partners every now and again. They don’t have a lot of pipelines in the Marcellus/Utica region–but what they do have is important. One of the pipelines operated by Boardwalk is the huge Texas Gas Transmission (TGT)–originally built from the Louisiana Gulf Coast to the upper Midwest to supply Illinois, Indiana and Ohio with natural gas. But then the Marcellus/Utica Shale happened and TGT needed to change strategies. Through a series of projects, TGT made the pipeline system bidirectional, so it could flow gas from the Marcellus/Utica to points south, going as far as the Gulf Coast. In May 2016 TGT began to flow up to 626 million cubic feet per day of Marcellus/Utica gas as far away as the Gulf Coast (see 626 Mmcf/d of Northeast Shale Gas Begins Flowing to Gulf Today). Little known fact: About half of that gas, some 300 Mmcf/d, goes to Cheniere’s Sabine Pass LNG export plant, where it’s super-cooled into LNG and shipped to other countries. Boardwalk is in a multi-year process of expanding TGT by another 384 MMcf/d of capacity. In April 2017, the company asked FERC for an extension to complete the project, until 2020 (see Texas Gas Asks FERC for Extra 2 Yrs on Northern Supply Access Proj). We bring you all of that information to point out Boardwalk’s importance to our region, and to introduce the news that the parent company that owns most of Boardwalk, Loews Corp., is in the process of “buying out” the MLP (master limited partnership) units it doesn’t already own, and then removing all MLP units (i.e. shares) from public trading. In other words, it’s going private. Why? Due to the Trump tax cut and subsequent FERC ruling that makes MLPs much less attractive as a form of organization than they once were…
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Texas Gas Asks FERC for Extra 2 Yrs on Northern Supply Access Proj

Click for larger version

Texas Gas Transmission (TGT) is a big pipeline network owned and operated by Boardwalk Pipeline Partners. Originally built from the Louisiana Gulf Coast to the upper Midwest, the purpose of the pipeline system was to supply Illinois, Indiana and Ohio with natural gas. Then the Marcellus/Utica Shale happened and TGT needed to change strategies. Through a series of projects, TGT made the pipeline system bidirectional, so it could flow gas from the Marcellus/Utica to points south, going as far as the Gulf Coast. One of the primary projects to accomplish that objective is called the Northern Access Supply Project, which first landed on our radar in Sept. 2015 (see Northern Supply Access Proj. Expands OH to Gulf Pipeline Capacity). Northern Access Supply was authorized by the Federal Energy Regulatory Commission (FERC) in March 2016 to “construct a new compressor station in Hamilton County, Ohio and make modifications at eight existing compressor stations in, Indiana, Kentucky, Tennessee, Mississippi, and Louisiana in order to enable Texas Gas to provide an additional 384,000 million British thermal units (“MMBtu”) per day of firm transportation service primarily in a north-to-south direction on Texas Gas’s system while maintaining Texas Gas’s current ability to flow gas south-to-north.” FERC gave TGT two years to get the work done (deadline March 2018). While some of the work has been done, not all of it has–and now TGT is asking for more time–an additional two years (to March 2020) to complete the project. Why? Because one of shippers contracted to use 100,000 MMBtus of that capacity (or 26% of the increased capacity) has filed for bankruptcy and can’t fulfill its commitment. So TGT wants to delay the final work until it has more customers for the other 100,000 MMBtus of capacity…
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626 Mmcf/d of Northeast Shale Gas Begins Flowing to Gulf Today

Ohio-Louisiana Access Project map
Ohio-Louisiana Access Project map – click for larger version

Fantastic news! More Marcellus and Utica Shale gas will begin flowing to the Gulf Coast, beginning today. Some of that gas will go to the Sabine Pass LNG (liquefied natural gas) export facility owned by Cheniere Energy–the first such facility to (recently) begin exporting natural gas to other countries. In October 2014 Boardwalk Pipeline Partners filed a request with the Federal Energy Regulatory Commission (FERC) to reverse the flow on a 690-mile segment of their Texas Gas Transmission pipeline to begin carrying Marcellus and Utica Shale gas from the northeast to the south (see Texas Gas Seeks to Reverse Flow of Pipeline from OH to LA). In September 2015 FERC approved the project, called the Ohio-Louisiana Access Project (see FERC Approves Important Utica-to-Gulf Coast Pipeline Reversal). Today the pipeline reverses and Sabine Pass is the foundation shipper–beginning to accept 300 million cubic feet per day (Mmcf/d) of yummy and wholesome Marcellus and Utica Shale gas…
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Bluegrass Pipeline Aborted Before It was Born – RIP

Is it time to declare the Bluegrass Pipeline dead? It certainly appears that way. The Bluegrass, you may recall, was a $1.5 billion joint venture between Williams and Boardwalk Pipeline Partners project that would have piped natural gas liquids (NGLs, mostly ethane) from the Utica/Marcellus all the way to Gulf Coast for processing and sale. Some 200 miles of the pipeline was due to be built through Kentucky–the Bluegrass State. But the wacky libs of Kentucky pushed back, suing Bluegrass over its plan to use eminent domain. In March 2014, Franklin Circuit Judge Phillip Shepherd ruled Bluegrass could not use eminent domain (see Judge Rules Bluegrass Pipeline Cannot Use Eminent Domain in KY). At that point Williams and Boardwalk squabbled over the future of the project (see Williams Stops Work on Bluegrass Pipeline, Boardwalk Says “It’s Not Dead”). The case moved on to the Court of Appeals. In May 2015, a three-judge panel agreed with Franklin Circuit Judge Shepherd that only pipeline companies that are or will be regulated by the state’s Public Service Commission can use eminent domain (see Appeals Court blocks Bluegrass Pipeline eminent domain). The case went all the way to the Kentucky Supreme Court where, last week, the high court ruled the lower court rulings will stand. Case closed…
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Northern Supply Access Proj. Expands OH to Gulf Pipeline Capacity

Texas Gas Transmission Northern Supply Access project map
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Last week MDN told you that the Federal Energy Regulatory Commission (FERC) had approved a project by Boardwalk Pipeline Partners to reverse the flow on their Texas Gas Transmission pipeline to haul natural gas from the Utica/Marcellus to the Gulf Coast (see FERC Approves Important Utica-to-Gulf Coast Pipeline Reversal). We have word on a second project, called the Northern Supply Access Project, also related to the Utica/Marcellus and the Texas Gas Transmission pipeline. FERC recently announced they will conduct an Environmental Assessment (EA) on the Northern Supply Access Project…
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FERC Approves Important Utica-to-Gulf Coast Pipeline Reversal

approvedLast October MDN told you about an exciting project from Boardwalk Pipeline Partners’ Texas Gas Transmission pipeline that will reverse the flow from the Louisiana Gulf Coast all the way to Ohio (see Texas Gas Seeks to Reverse Flow of Pipeline from OH to LA). The $110 million project, called the Ohio-Louisiana Access Project, would turn Texas Gas Transmission’s pipeline bidirectional and will not involve any new pipeline construction. It will provide an important new way for Utica and Marcellus drillers to get their gas to markets in the Midwest, South, and even to other countries via exports of LNG. As is typical, anti-fossil fuelers flooded the Federal Energy Regulatory Commission (FERC) with negative comments about the project because it will encouraging more fracking. Undeterred, FERC approved the project last week, responding to antis (as they have before) by telling them FERC’s charter does not allow it to consider the source of gas or “climate change” or any of the other cockamamie things antis are worry about. FERC decides on projects based on how a project will affect the people and environment where the project gets built… Continue reading

Sabine Pass LNG Export Expansion Approved, Utica Gas Heading There?

Good news for Marcellus/Utica drillers–especially those in the Ohio Utica. Last Friday the U.S. Dept. of Energy issued a final authorization for an expansion to Cheniere Energy’s Sabine Pass Liquefaction LNG export facility in Cameron Parish, Louisiana. The approval means Sabine Pass can now export domestically produced liquefied natural gas (LNG) to countries that do not have a Free Trade Agreement (FTA) with the United States. The approval expands export capacity at the facility by an extra 1.38 billion cubic feet of natural gas per day (Bcf/d), to a new total of 3.58 Bcf/d. Why is it good for Utica drillers? Because at least one pipeline project will connect from Ohio all the way to the Sabine Pass facility (see Texas Gas Seeks to Reverse Flow of Pipeline from OH to LA), meaning some Utica and Marcellus Shale gas will get exported from the Gulf Coast…
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KY Court Decision Goes Against Pipelines re Eminent Domain

In December of 2013, a group of people opposed to the Bluegrass natural gas liquids (NGL) pipeline in Kentucky called KURE (Kentuckians United to Restrain Eminent Domain) sued the Bluegrass, a joint venture of Williams and Boardwalk Pipeline Partners, to prevent them from using eminent domain (see Bluegrass NGL Pipeline’s Eminent Domain Challenged in KY Court). The argument was that the NGLs flowing through the pipeline just pass through Kentucky and don’t benefit local Kentuckians, therefore the pipeline has no right to use the state’s eminent domain law to force landowners to accept the pipeline. That is, it’s not a permitted utility under the definition of the law. In March 2014, a circuit court judge agreed with KURE and told Bluegrass they could not use eminent domain (see Judge Rules Bluegrass Pipeline Cannot Use Eminent Domain in KY). That takes a pretty big stick away from the Bluegrass in their fight to lay the pipeline. Not long after the judge’s decision Williams gave up on the project, although Boardwalk didn’t (see Williams Stops Work on Bluegrass Pipeline, Boardwalk Says “It’s Not Dead”). The circuit court judge’s decision was appealed, and last week the Kentucky Court of Appeals upheld the previous no-eminent domain decision. This new decision has implications for the Bluegrass to be sure, but it has even more implications for an active project now under way by Kinder Morgan…
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Texas Gas Seeks to Reverse Flow of Pipeline from OH to LA

Texas Gas Transmission owns an extensive natural gas pipeline system with about 6,100 miles of pipelines. Some 690 miles of that system runs from the Gulf Coast in Louisiana all the way to southwest Ohio (see map below). Earlier this month, Texas Gas, a wholly-owned subsidiary of Boardwalk Pipeline Partners, filed a request with the Federal Energy Regulatory Commission (FERC) to reverse the flow on their 690-mile segment and begin to carry Marcellus and Utica Shale gas from the northeast to the south. Actually, what they want to do is turn the pipeline into a bi-directional flow–so the gas can go either way. The project is called the Ohio-Louisiana Access Project and no new pipeline is needed–just modifications of yard and station piping at four existing compressor stations along with building one new compressor station (project cost of $115 million). Here’s the details…
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Lancaster OH Commissioner Says Bluegrass Pipeline was Trigger-Happy

Lancaster (Fairfield County), OH Commissioner Steve Davis is also an attorney who represents landowners who sign leases to allow pipelines to cross their property. Davis has been around the block a few times and has brokered numerous deals with different pipeline companies–so he’s well qualified to offer an opinion about the now delayed, and possibly cancelled, Bluegrass Pipeline project from Williams and Boardwalk Pipeline Partners. Davis isn’t shy about his opinion, saying Williams didn’t have a good strategy for the way they were buying leases for the Bluegrass–calling them “trigger-happy,” changing strategy every few weeks.

Davis also offered up some numbers as to how high (per acre) some landowners received for Bluegrass signing bonuses–numbers that make the best Utica lease bonuses look like pocket change…
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Williams Stops Work on Bluegrass Pipeline, Boardwalk Says “It’s Not Dead”

Really big news that affects drilling throughout the Marcellus and Utica Shale region: Williams announced yesterday they are suspending work on the Bluegrass Pipeline, a $1.5 billion project that would have piped natural gas liquids (NGLs) from the Utica/Marcellus all the way to Gulf Coast for processing and sale. Looks like we now know who the winner of the “midstream knife fight” is: the Kinder Morgan/MarkWest joint venture UTOPIA pipeline (see “Midstream Knife Fight” – Who Will Have 1st Operational NGL Pipeline to Gulf?). Although Williams says the project is done, their joint venture partner in the Bluegrass, Boardwalk Pipeline Partners, says “it’s not dead.” Really? What does that mean?

Below we have the Williams statement that the Bluegrass is dead, the quote from Boardwalk saying it isn’t dead, and our opinion as to what may have pushed Williams to throw in the towel on this very important project, potentially leaving northeast drillers without options for NGLs…
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Boardwalk Talks About Bluegrass: That’s My Story and I’m Sticking to It

Yesterday Boardwalk Pipeline Partners held an analyst call to update investors on their first quarter 2014 performance. As we wrote about a few months ago, Boardwalk’s stock fell off a cliff (down 50%) and is just now beginning to inch it’s way back up the cliff (see Serious Concerns about Boardwalk Pipeline Partners Continue). Yesterday’s analyst call coincided with the release of information that both Williams and Boardwalk, together in a joint venture to build the Bluegrass Pipeline, an important northeast to Gulf Coast NGL pipeline, have decided to suspend work on the pipeline. Williams hints that the project is all but dead, but Boardwalk says it isn’t (see our related story today).

We located the transcript of yesterday’s analyst call with Boardwalk and have extracted out all of the places where the Bluegrass was discussed. It’s interesting reading, providing us with a bit more color and context. For us it evokes Collin Raye’s song, “That’s My Story and I’m Sticking to It” as we read the comments by Boardwalk and the press release by Williams. Both partners have obviously decided to script the announcement–both are singing from the same song sheet, as it were. The stated reason they’ve stopped working on the Bluegrass? Not enough customer interest. Which, as we point out in today’s related story, we think is sort of bogus. Here’s what was said yesterday on the Boardwalk call about the Bluegrass suspension…
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Judge Rules Bluegrass Pipeline Cannot Use Eminent Domain in KY

On Monday MDN brought you the news that the Kentucky House had voted to strip the right to use eminent domain from natural gas liquids pipelines (see Kentucky House Votes to End Eminent Domain for Bluegrass Pipeline). An alert MDN reader predicted the measure wouldn’t get signed into law because the KY Senate president said with only 10 days left in this session, it’s not likely to come up for a vote in the Senate (see Bluegrass Pipeline bill passes House).

Looks like it won’t matter what the KY legislature does. Last December a lawsuit was filed by a group calling itself KURE (Kentuckians United to Restrain Eminent Domain), to prevent the Bluegrass Pipeline from using eminent domain in the Bluegrass state (see Bluegrass NGL Pipeline’s Eminent Domain Challenged in KY Court). Yesterday Franklin Circuit Judge Phillip J. Shepherd ruled in KURE’s favor and said the Bluegrass cannot use eminent domain to force landowners to allow the pipeline to be buried under their property…
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Kentucky House Votes to End Eminent Domain for Bluegrass Pipeline

The Bluegrass natural gas liquids (NGL) pipeline is a $1.5 billion project that will stretch from the Utica/Marcellus all the way to Gulf Coast. It’s being built by Williams and Boardwalk Pipeline Partners and as of last October the joint venture partners held an open season and said everything is on track for a 2015 launch (see Bluegrass Pipeline Launches Open Season, on Track for 2015 Launch). But a lot has happened in the past six months, including Boardwalk’s stock tanking (see Serious Concerns about Boardwalk Pipeline Partners Continue). Not only that, but there’s been a lot of anti-pipeline sentiment in Kentucky–one of the states the new pipeline must cross on its way to the Gulf Coast. So much anti-pipeline sentiment that Boardwalk and Williams have threatened using eminent domain in order to get the property they need for a crossing (see Bluegrass NGL Pipeline’s Eminent Domain Challenged in KY Court).

The eminent domain issue is coming to a head in Kentucky with respect to the Bluegrass Pipeline. Last Friday the KY House voted to approve House Bill (HB) 31 which will strip NGL pipelines of their right to use eminent domain in the state. The measure now heads to the Senate. What are its chances? No one is saying, although Boardwalk and Williams have hired no less than nine lobbyists to make their case with KY lawmakers…
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Serious Concerns about Boardwalk Pipeline Partners Continue

Two weeks ago MDN told you about the developing story that Boardwalk Pipeline Partners has hit a serious rough patch and their stock price was plummeting (see Boardwalk’s Stock Drops Like a Rock – Trouble in Midstreamland?). The situation has not improved and their stock price is down nearly 50% from where it was just a short time ago. Why do we care?

Boardwalk is in a joint venture with Williams to build the Bluegrass NGL pipeline from the Marcellus/Utica all the way to the Gulf Coast. The Bluegrass has hit trouble, ironically, in the Bluegrass state of Kentucky with anti-drillers opposing it every step of the way (see the list of MDN’s Bluegrass pipeline trouble stories here). With one of the two Bluegrass pipeline partners in financial straights, what does that mean for the pipeline project? Especially since they have competition and it’s a horse race with a Kinder Morgan/MarkWest joint venture (see “Midstream Knife Fight” – Who Will Have 1st Operational NGL Pipeline to Gulf?). Here’s the latest analysis of how, and why, Boardwalk finds itself in the position they are now in…
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Boardwalk’s Stock Drops Like a Rock – Trouble in Midstreamland?

Boardwalk Pipeline Partners, a Houston-based midstream company, suffered a massive stock drop on Monday (down over 40% in one day) after announcing a big drop in revenue and earnings and lowering cash distribution some 81%. Boardwalk’s stock recovered slightly yesterday–something traders refer to pejoratively as a “dead cat bounce”–meaning when something drops so far from such a height, when it hits bottom it’s likely to bounce at least a little. Ouch. To date, Boardwalk has no presence with its pipelines and other operations in the northeastern Marcellus/Utica region–so why is it news here?

Number one, much of the reason for Boardwalk’s woes is precisely because they don’t have infrastructure in the northeast, an area white hot with activity. Number two, because Boardwalk, partnering with Williams, is trying to establish a presence in the northeast by building the Bluegrass mixed NGL pipeline from the Marcellus/Utica to the Gulf Coast. And Boardwalk/Williams is in a horse race with Kinder Morgan/MarkWest to see who builds their pipeline first (see “Midstream Knife Fight” – Who Will Have 1st Operational NGL Pipeline to Gulf?). Will Boardwalk’s stock drop affect Bluegrass plans? And, as one analyst asks, will Boardwalk’s stock drop bleed over and affect similar midstream companies?…
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