North American energy firm, Williams Companies
Inc. ( WMB
) declared that it has formalized the joint venture with a master
limited partnership, Boardwalk Pipeline Partners
LP ( BWP ),
for developing a pipeline project. On Mar 6, 2013, both the parties
signed a letter of intent to form this venture.ATLAS ENERGY LP (ATLS): Free Stock Analysis
ReportBOARDWALK PIPLN (BWP): Free Stock Analysis
ReportEQT MIDSTRM PTR (EQM): Free Stock Analysis
ReportWILLIAMS COS (WMB): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment
The Bluegrass 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, W. Va and Pa.
In the first phase of the development, the pipeline system will
carry the NGL at a rate of 200,000 barrels a day from the producing
regions of Ohio, W. Va and Pa. In the second phase, in order to
support the 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, W. Va and Pa. 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 are also planning to
build a new liquefied petroleum gas terminal on the Gulf Coast to
better access international customers.
The proposed pipeline is expected to be operational in the second
half of 2015, subject to the fulfillment of all the required
Tulsa, Okla.-based Williams is a premier energy infrastructure
provider in North America. The company's core operations include
finding, producing, gathering, processing, and transportation of
Williams' midstream assets, which are less sensitive to commodity
prices, help the company to maintain a steady stream of revenues
and cash flow even if natural gas prices stay low.
However, we remain concerned about Williams Companies' high debt
levels, which leaves it vulnerable to an extended drop in commodity
prices. As of Mar 31, 2013, Williams had long-term debt of more
than $10.6 billion, representing a debt-to-capitalization ratio of
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.
Two energy infrastructure suppliers, Atlas Energy
LP ( ATLS
) and EQT Midstream Partners LP ( EQM ) are expected to
significantly outperform the broader U.S. equity market over the
next one to three months. Both the firms sport a Zacks Rank #1