Boardwalk says Bluegrass project not dead even after investment halt

Boardwalk Pipeline Partners (BWP) says its Bluegrass pipeline project to ship natural gas liquids from the Marcellus and Utica shale areas to the Gulf coast isn't dead, even after Williams Cos. (WMB) said it would suspend investment in the project.

Bluegrass’ demise would remove the financing, regulatory and execution risks of the project, and may lead investors to "question the security" of other WMB, according to Jefferies analyst Chris Sighinolfi, who notes WMB had included the pipeline in its projections while BWP hadn’t.

BWP today reported Q1 earnings that included a $10M impairment cost related to the project.

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Comments (3)
  • Brucejfern
    , contributor
    Comments (1740) | Send Message
    This looks very similar to APL when Williams did not have a partner that could meet their commitments. Eventually Chevron bought APL out of its JV with Williams. Turned out to be a godsend for APL shareholders as Chevron paid over 30x ebitda and to date has not realized any real return on their JV investment.


    APL went on to quad in value before recent setbacks.
    28 Apr 2014, 07:15 PM Reply Like
  • King Rat
    , contributor
    Comments (1845) | Send Message
    Brucejfern, you are right, but could that nugget of history not also discourage somebody from overpaying in this case?
    28 Apr 2014, 08:24 PM Reply Like
  • j town
    , contributor
    Comments (13) | Send Message
    This project is not dead. I live in the area of KY where this pipeline created a major controversy. Some landowners made agreements with the companies, others did not. The companies wanted to use the power of eminent domain to strongarm landowners who refused them. Leaders in dozens of counties, as well as citizen-led organizations, had come out against the project. The courts agreed that private companies could not exercise the power of eminent domain to threaten landowners for a project that has no public interest. However, the companies are appealing the decisions, but it may go directly to the KY supreme Court. Meanwhile, if the companies can get enough landowners to agree to grant an easement through their land, then the project could go back on schedule. Considering the state of our economy, money talks very loud, and struggling landowners could be convinced to grant an agreement if the price is right. My farm is not within the area of the pipeline, but even though I signed a petition against the pipeline, my attitude may have been challenged if my farm were in the pipeline route and the companies offered me a million dollars to buy my land...or offered $150,000 a year to lease my land. We are senior citizens, still working, still struggling financially, and are tired of it all...tired of a government that is controlled by big business and cares little for the needs of the majority, except to use our tax money for their pleasure. Being able to retire and start enjoying life before we are too old, becomes very tempting. I can truly see both sides of the battle.
    30 Apr 2014, 02:18 PM Reply Like
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