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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Open Season for Bluegrass NGL Pipeline Extended Extra 30 Days

In October MDN told you the proposed Bluegrass Pipeline, a natural gas liquids (NGL) pipeline that will be built from the Marcellus/Utica to the Gulf Coast, was far enough along that joint venture partners in building the Bluegrass Williams and Boardwalk Pipeline launched an open season to lock in drillers who want to ship their NGLs out of the northeast (see Bluegrass Pipeline Launches Open Season, on Track for 2015 Launch). The open season was due to end next week, Dec. 16.

Late yesterday Williams/Boardwalk extended the open season another month, to Jan. 17, 2014. They say the extension is at the request of shippers who need more time to decide. Is that just blowing smoke? For real? How would you read the tea leaves? Here’s the announcement:
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Bluegrass NGL Pipeline’s Eminent Domain Challenged in KY Court

A small but dedicated group of anti-drillers in Kentucky continue to oppose plans by Williams and Boardwalk Partners to build the Bluegrass natural gas liquids (NGL) pipeline through their state. The Bluegrass will stretch from the Marcellus/Utica all the way to the Gulf Coast. MDN estimates it will cost at least $1.5 billion to build it (see 2013 Marcellus and Utica Shale Databook – Volume 2). We told you about previous efforts to stop the pipeline in, ironically, the Bluegrass state–Kentucky (see Bluegrass NGL Pipeline Encounters Resistance from Some in KY and Bluegrass NGL Pipeline Hits Brick Wall in the Bluegrass State). We even told you about God getting involved (see Thank God the Bluegrass Pipeline will Bypass Marion County Nuns).

Looks like the anti-drillers have not given up. A new group with the cutsie name KURE (Kentuckians United to Restrain Eminent Domain) has formed to oppose the pipeline. Their strategy is to deny the Bluegrass the right to use eminent domain to lay pipeline under property where landowners don’t want it. KURE filed a lawsuit yesterday in Franklin Circuit Court (Frankfort, KY) questioning the legality of eminent domain for the Bluegrass…
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“Midstream Knife Fight” – Who Will Have 1st Operational NGL Pipeline to Gulf?

In the race to be the first pipeline to flow ethane from the Marcellus/Utica region to a cracker plant elsewhere, it looks like Sunoco Logistics may have won. Their Mariner West pipeline to Sarnia, Canada has been in testing since July and due to turn throw the valve wide open in November, according to Range Resources (see Range Resources 3Q13: Nearing 1 Bcf/d, Rev Up 29%, Costs Down 12%). However, not to be outdone, the Appalachia to Texas Express (ATEX) ethane pipeline being built by Enterprise Products Partners now says they will go fully online in December, months ahead of schedule (see ATEX Ethane Pipeline to Begin Pumping Dec 2013, Ahead of Schedule). Both pipelines going online a month apart? We’d call it a photo finish with Mariner West winning by a nose.

Now everyone’s attention is turning to mixed NGL (natural gas liquids) pipelines. There’s another horse race heating up. Williams and Boardwalk Pipeline Partners are building the Bluegrass pipeline to the Gulf Coast (see Bluegrass Pipeline Launches Open Season, on Track for 2015 Launch). And then there is Kinder Morgan and MarkWest Utica who have joined forces to build a mixed NGL pipeline to the Gulf Coast too (see 2 New OH Projects: Cryo Processing Plant & NGL Pipeline to Gulf). Which one will be the first to go operational? Several analysts weigh in with their colorful opinions…
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Bluegrass Pipeline Launches Open Season, on Track for 2015 Launch

Williams and Boardwalk Pipeline Partners that are together building the Bluegrass Pipeline–a natural gas liquids (NGL) pipeline from the Utica/Marcellus region in the northeast all the way to the Gulf Coast–announced yesterday they will conduct a binding open season for drillers to sign up to use the new pipeline, starting next week on Oct 29.

The most recent edition of the Marcellus and Utica Shale Databook (Volume 2), estimates the Bluegrass Pipeline project will cost on the order of $1.5 billion to complete. Construction is under way now and the new pipeline, with an initial takeaway capacity of 200,000 barrels per day, is expected to be done and in service in late 2015. The announcement (and more details) from Williams and Boardwalk:
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Bluegrass Pipeline Makes Progress in Bluegrass State

In early September, MDN reported that Williams and Boardwalk Partners, joint venture partners building a natural gas liquids (NGL) pipeline that will stretch from the Utica/Marcellus all the way to the Gulf Coast, had hit some problems in crossing Kentucky (see Bluegrass NGL Pipeline Hits Brick Wall in the Bluegrass State).

The companies now report they have landowner agreements in place for nine of 13 counties they need to cross in KY, so progress is definitely being made…
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Rumor Now Reality: Williams/Boardwalk to Build Gulf LPG Terminal

Williams and Boardwalk Pipeline Partners announced in March they will build a natural gas liquids (NGL) pipeline that would run from the Marcellus/Utica region all the way to the Gulf Coast. They dubbed the new pipeline the Bluegrass Pipeline (see Williams, Boardwalk Announce Marcellus-to-Gulf Coast NGL Pipeline). But where would the new pipeline connect to along the Gulf Coast to process the NGLs? In July, we heard rumors that Williams and Boardwalk were considering building a new LPG export facility to process and export the Marcellus/Utica NGLs (see Bluegrass NGL Pipeline Recap, Builders Eye LNG Exports Too).

It’s no longer a rumor…
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Thank God the Bluegrass Pipeline will Bypass Marion County Nuns

Thank God the Bluegrass Pipeline will avoid running through property owned by a bunch of liberal Catholic nuns in Marion County, KY. No really, thank the good Lord! (Can I hear an Amen?) Williams and Boardwalk Pipeline Partners–the joint partners building the Bluegrass natural gas liquids (NGL) pipeline, a pipeline that carries (gasp!!) “flammable liquids”–say the NGL pipeline will not cross the holy ground of the Sisters of Loretto. But have no fear, the sisters say they’ll oppose it wherever it goes anyway.

Don’t tell the sisters or the AP reporter writing the very slanted article (below), but natural gas running through bazillions of miles of natgas pipelines buried under the ground in every major and minor city across America is just as “flammable” as what will run through the Bluegrass Pipeline when it’s built and operating…
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Bluegrass NGL Pipeline Hits Brick Wall in the Bluegrass State

In a touch of irony, the Bluegrass Pipeline–a proposed new natural gas liquids (NGL) pipeline that will stretch from the Utica/Marcellus region all the way to the Gulf Coast (see Williams, Boardwalk Announce Marcellus-to-Gulf Coast NGL Pipeline)–has hit a brick wall in the Bluegrass State–Kentucky.

Williams and Boardwalk Pipeline, co-owners of the project, maintain that because the Bluegrass Pipeline is an interstate pipeline they can (if need be) invoke eminent domain to force landowners to let them lay the pipeline under their property. Kentucky Energy Secretary Len Peters says not so fast. His team of legal beagles has researched it and they say the Bluegrass Pipeline does not have eminent domain status in the Bluegrass State. We see a legal show-down on the horizon…
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Bluegrass NGL Pipeline Encounters Resistance from Some in KY

The Bluegrass natural gas liquids (NGL) pipeline, announced in March 2013, will run from the Marcellus/Utica region southwest all the way to the Gulf Coast in Louisiana (see Williams, Boardwalk Announce Marcellus-to-Gulf Coast NGL Pipeline). The pipeline’s route will take it through Kentucky, where it will connect to Boardwalk’s Texas Gas Transmission, LLC system (Texas Gas) in Hardinsburg, KY. From Hardinsburg, the existing natgas Texas Gas pipeline will be converted to run NGLs. The entire project is slated to be up and running by late 2015.

However, some residents in KY are objecting to the pipeline. Do they have any valid points?…
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Bluegrass NGL Pipeline Recap, Builders Eye LNG Exports Too

An update on the proposed new natural gas liquids (NGL) Bluegrass Pipeline, a joint venture between Williams Partners and Boardwalk Pipeline Partners. As MDN previously reported, the Bluegrass will run from Ohio/Pennsylvania all the way to the Gulf Coast (see Williams, Boardwalk Announce Marcellus-to-Gulf Coast NGL Pipeline).

The update below, courtesy of the Akron Beacon Journal, does a good job of recapping what we do and don’t know about the pipeline project and where it will be built. The update also includes new information: In addition to gas liquids going to the Gulf, Williams and Boardwalk are eyeing LNG export terminals along the Gulf Coast as a market for the methane portion of what they’ll pipeline from the Utica/Marcellus…
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Bluegrass Pipeline – Possible Map & Route Through Ohio ID’d

We’re now narrowing in on the proposed route for the Bluegrass Pipeline–a natural gas liquids pipeline coming from Williams and Boardwalk Pipeline Partners that will repurpose some existing pipelines and build new sections.  The pipeline will run from the Marcellus/Utica region all the way to the Gulf Coast–to carry NGLs to the Gulf for processing (see Williams, Boardwalk Announce Marcellus-to-Gulf Coast NGL Pipeline).

Williams and Boardwalk have not released a map of the proposed official route, but using several recent articles and a site set up by lawyers who want to represent landowners whose property the pipeline will cross, we’ve got a map of the proposed route through Ohio and a pretty good idea of where, in certain counties, the pipeline will cross…
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Bluegrass NGL Pipeline Going Through Guernsey County, OH?

In March, Williams and Boardwalk Pipeline Partners announced a joint venture to re-purpose existing pipelines and build new sections of pipeline to carry natural gas liquids from the Marcellus/Utica region to the Gulf Coast for processing (see Williams, Boardwalk Announce Marcellus-to-Gulf Coast NGL Pipeline). The exact route of the new Bluegrass Pipeline, as they call it, has not been disclosed. However, we have an idea of where some of it will be built as it crosses Ohio…
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Zeits Takes A Closer Look at the Bluegrass NGL Pipeline

Energy analyst Richard Zeits, writing on the Seeking Alpha website, turns his attention to the recently announced Bluegrass Pipeline which will transport natural gas liquids (NGLs) from the Marcellus/Utica region to the Gulf Coast for processing (see Williams, Boardwalk Announce Marcellus-to-Gulf Coast NGL Pipeline for background and MDN’s analysis). Zeits begins his deep dive on the Bluegrass (and the wider issue of NGLs) this way:

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Williams, Boardwalk Announce Marcellus-to-Gulf Coast NGL Pipeline

Williams and Boardwalk Pipeline Partners, two midstream (pipeline) companies today announced a bold new project to build and repurpose some existing pipelines into a new natural gas liquids (NGL) pipeline that will run from the Marcellus and Utica Shale region all the way to the Gulf Coast. The new project, dubbed the Bluegrass Pipeline, would provide an initial 200,000 barrels of NGL capacity per day, expandable to 400,000 barrels. If all goes according to plan, Williams and Boardwalk would like to have the new pipeline online by late 2015.

The JV partners maintain the pipeline is needed because in just a few years the northeast will have too much NGLs and not enough processing capacity to handle it all. MDN heard that argument and its opposite argued at the recent Utica Shale event we attended in Columbus. More analysis about the Williams announcement (and a quick NGL processing primer) from MDN below. First, here’s the press announcement today from Williams and Boardwalk, including a rough map of the route:

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