Boardwalk Pipeline Partners L.P. (BWP)

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Boardwalk Pipeline Partners LP (BWP)

Q4 2009 Earnings Call

February 8, 2010 9:00 am ET

Executives

Alison McLean – Director, Investor Relations

Rolf Gafvert – Chief Executive Officer

Jamie Buskill – Chief Financial Officer

Analysts

Darren Horowitz – Raymond James

Sharon Lui – Wells Fargo

Ross Payne – Wells Fargo

John Edwards – Morgan Keegan

[Robert Schwain – Brim Securities]

Barrett Blaschke – RBC Capital Markets

Elvira Scotto – Credit Suisse

Presentation

Operator

Welcome to the fourth quarter 2009 Boardwalk Pipeline Partners LP earnings conference call. (Operator Instructions) I would now like to turn the presentation over to Miss Alison McLean, Director of Investor Relations.

Alison McLean

Good morning everyone and welcome to the fourth quarter 2009 earnings call for Boardwalk Pipeline Partners LP. I’m Alison McLean and I’m pleased to be joined today by Mr. Rolf Gafvert, our CEO and Mr. Jamie Buskill, our CFO.

If you’d like a copy of the earnings release associated with this call, please download it from our website at www.bwpmlp.com. Following our prepared remarks this morning we will turn the call over for your questions.

We would like to remind you that this conference call will include the use of statements that are forward-looking in nature. Statements in the earnings call related to matters that are historical facts are forward-looking statements. These statements are based on management’s beliefs and assumptions using currently available information and expectations. Actual results achieved by the company may differ materially from those projected in any forward-looking statements.

The company expressly disclaims any obligation to update or revise any forward-looking statements made during this call.

I’d also like to remind you that during this call today we may discuss certain non-GAAP financial measures such as EBITDA. With regard to such financial measures, please refer to our earnings release for reconciliations with the most comparable GAAP measures.

Now I’d like to turn the call over to Mr. Rolf Gafvert.

Rolf Gafvert

Thank you Alison and good morning everyone. I hope all of you have had a chance to review the press release we issued this morning. We closed out the year with a strong fourth quarter, both in terms of progress made on our expansion projects and the positive impacts these expansion projects are having on our cash flow.

Last Friday we declared a fourth quarter distribution of $0.50 per unit. We have increased our distribution each quarter since our initial public offering in 2005. I will discuss our expansion and growth projects, and then Jamie will discuss our financial performance in greater detail.

First, an update on our 42 inch projects, East Texas, Southeast and Gulf Crossing; on December 16, we announced that we received approval from the Pipeline and Hazardous Material Safety Administration, or PHMSA, or operate our 42 inch pipeline projects at their full designed capacity.

Our 42 inch systems represent a significant portion of our expansion capacity. Operating at full design capacity will allow us to maximize the benefit of our Gulf Crossing Mira compression station which is expected to be placed in service in late March.

Since mid October, we have been operating at standard operating pressures on our 36 inch projects, Fayetteville and Greenville laterals. Both the Isola and Ball Knob compressors were placed into service in January 2010.

With these compressor stations in service, and operating at normal pressures, we are currently capable of delivering 1.1 bcf per day on our Fayetteville lateral and the maximum design capacity of 1.0 bcf per day on our Greenville lateral.

On the Fayetteville lateral we will be able to meet all of our customer requirements until mid 2011 at the 1.1 bcf per day level. We are working to obtain approval from PHMSA to operate the Fayetteville lateral at its full design capacity which would allow us to increase capacity on that system to 1.3 bcf per day.

Now I would like to comment on our Park and Landing business. In 2009 we saw favorable pricing spreads between the spot price and natural gas in the futures market and as a result we more than doubled our parking and landing revenues when compared to 2008.

Finally, some comments on our future growth prospects. In December we announced the sale of 156 million cubic feet per day of firm transportation capacity under a 15 year agreement on our Haynesville project. With this agreement in place, the total contracted capacity for our Haynesville project is 556 million cubic feet per day with a weighted average contract life of 12 years.

We recently received approval and this project is proceeding as planned. We still anticipate a late fourth quarter 2010 in service day.

We continue to see strong demand for pipeline capacity from the Haynesville shale production area, and we’re pleased to announce our clearance compression project. This project will receive natural gas from the Haynesville area on our new 42 inch pipeline and will redeliver to markets on our Legacy system. The project is expected to cost approximately $30 million.

Subject to Perk approval, this project will involve the addition of a new compression station and clearance in Louisiana and we anticipate a late 2011 in service date. The shipper has contracted for a maximum of 134 million cubic feet a day of capacity under a long term firm agreement.

For both the Haynesville and the Clarence projects I just mentioned, we are simply adding transportation capacity by adding compression facilities to our existing footprint. These projects are great examples of how we can grow our business by optimizing our newly expanded footprint.

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