Last Tuesday, North American energy firm,
Williams Companies Inc.
) entered into a joint venture (JV) deal with a master limited
Boardwalk Pipeline Partners LP
Per the agreement, Williams and Boardwalk are expected to
manufacture the previously proposed export terminal of liquefied
petroleum gas (LPG) at Lake Charles, La. The terminal will have a
load rate capacity of 25,000 barrels per hour and will be able to
store roughly 900,000 barrels of refrigerated propane and butane.
Currently, both Williams and Boardwalk are looking for customers
to seal off-take agreements.
Earlier, Williams and Boardwalk had inked a JV contract for the
construction of Bluegrass Pipeline and Fractionation plant. The
natural gas liquid (NGL) that will be carried by the new pipeline
from the producing regions of Marcellus and Utica shale plays are
likely to be separated into its respective products like propane
and butane at Lake Charles, LA-based Fractionation plant.
However, the news - which was announced after the markets closed
on Tuesday - had negligible impact on the company's stock price.
By close of trade on Wednesday, Williams settled at $36.58 per
share, marginally 0.5% lower from the previous day. Moreover, on
Thursday, the closing price of the stock was $36.30.
Tulsa, OK-based Williams is a premier energy infrastructure
provider in North America. The company's core operations include
finding, producing, gathering, processing and transportation of
natural gas. With an extensive pipeline system, Williams is one
of the largest domestic transporters of natural gas by volume.
However, Williams' wide natural gas exposure raises its
sensitivity to the commodity prices, which continue to be
volatile. This translates into an uncertain near- to medium-term
outlook for the company.
Williams currently retains a Zacks Rank #3 (Hold), implying that
it is expected to perform in line with the broader U.S. equity
market over the next one to three months.
Meanwhile, one can look at energy production/pipeline entities
Oiltanking Partners LP
Pembina Pipeline Corp.
) that offer value. Both Oiltanking and Pembina Pipeline sport a
Zacks Rank #1 (Strong Buy).
BOARDWALK PIPLN (BWP): Free Stock Analysis
OILTANKING PTNR (OILT): Free Stock Analysis
PEMBINA PIPELN (PBA): Free Stock Analysis
WILLIAMS COS (WMB): Free Stock Analysis
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