As a result of a successful equity offering, which occurred earlier in the year, we were able to purchase the remaining equity ownership interest in Boardwalk HP Storage from an affiliate of our general partner for approximately $285 million. Purchasing the remaining equity interest in the HP Storage was the goal for us this year, and I'm very pleased that we were able to complete this transaction so early in the year. As Jamie will discuss in greater detail, these assets are already contributing to the financial results of the company. We also are developing a new cavern that will increase working gas capacity in HP Storage by approximately 5 billion cubic feet. This new cavern is expected to go into service in the first half of 2013.
Longer term, we are seeing demand respond to ample natural gas supplies in both the industrial and power generation sectors. In addition to the 100,000 MMBtu a day, Baton Rouge/River Corridor expansion that we discussed last quarter, in the first quarter of this year, we obtained a long-term firm commitment to serve an additional proposed combined cycle gas-fired plant. This additional commitment is for 125,000 MMBtu a day and is subject to the customer obtaining the necessary regulatory approvals to proceed with the construction of the plant. Collectively, these commitments will require approximately $50 million in growth capital. We anticipate that service will commence around the 2014 time frame.
For the industrial sector, we are seeing a heightened interest for delivery capacity, especially in the Mississippi River corridor area of Louisiana as industrials, particularly in the petrochemical segment, are beginning to develop or increase production in order to leverage low U.S. gas prices.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts