The board of directors of North American energy firm,
Williams Companies Inc.
) has approved its Bluegrass pipeline project. On May 28,
Williams formalized the joint venture with a master limited
Boardwalk Pipeline Partners LP
) for the development of Bluegrass.
BOARDWALK PIPLN (BWP): Free Stock Analysis
CHENIERE ENERGY (CQP): Get Free Report
OILTANKING PTNR (OILT): Free Stock Analysis
WILLIAMS COS (WMB): Free Stock Analysis
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The pipeline will carry natural gas liquids (NGL) to the growing
petrochemical complex on the Gulf Coast from Utica and Marcellus
shale plays situated in Ohio, West Virginia and Pennsylvania. The
pipeline will also supply NGL to the growing petrochemical market
in the U.S. Northeast.
In the first phase of development, the pipeline system will carry
NGL at a rate of 200,000 barrels a day from the producing regions
of the three aforementioned states. In the second phase, in order
to support growing market demand, the capacity of the pipeline
will be doubled to a rate of 400,000 barrels a day, by the
addition of extra pumping capacity.
Per the deal, a new pipeline will be constructed to carry NGL
from the producing regions of Ohio, West Virginia and
Pennsylvania to the Texas Gas Transmission system of Boardwalk,
based in Hardinsburg, Ky. Additionally, a fractionation plant and
NGL storage facilities will be developed in La. Moreover, the
companies also have plans to build a new liquefied petroleum gas
terminal on the Gulf Coast to better access international
The proposed pipeline is expected to be operational in the second
half of 2015, subject to the fulfillment of all the required
conditions. However, the cost of the project was not disclosed by
any of the companies.
Williams currently retains a Zacks Rank #5 (Strong Sell),
implying that it is expected to underperform the broader U.S.
equity market over the next 1 to 3 months.
Meanwhile, one can look at other energy production/pipeline
Oiltanking Partners LP
Cheniere Energy Partners LP
) as attractive investments. All these firms sport a Zacks Rank
#1 (Strong Buy).