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Boardwalk And Its General Partner To Acquire PL Midstream LLC

Boardwalk Pipeline Partners, LP (NYSE:BWP) (“Boardwalk”) announced today that it has formed a joint venture with an affiliate of its general partner, which has entered into a definitive agreement to acquire PL Midstream LLC (“PL Midstream”) from PL Logistics LLC, a portfolio company of Lindsay Goldberg, LLC, for $625 million in cash, subject to customary adjustments.

“The PL Midstream acquisition supports our long-term growth strategy of diversifying into industries that complement our core natural gas pipeline and storage businesses,” said Stan Horton, Boardwalk’s President and CEO. “This acquisition enables Boardwalk to enter the natural gas liquids business with strategically-located and well-contracted assets and a strong, experienced management team. We are pleased to expand into a business with similar operational and financial characteristics to our core businesses, yet a different commodity market environment.”

PL Midstream is a rapidly growing midstream company that has assets strategically located to participate in the resurgent petrochemicals boom in the U. S. Gulf Coast region and has attractive, fee-based contracts with a weighted-average life of approximately ten years. The company provides salt-dome storage, pipeline transportation, fractionation and brine supply services for producers and consumers of petrochemicals, natural gas liquids (NGLs) and natural gas through two hubs in southern Louisiana, the Choctaw Hub in the Mississippi River Corridor and the Sulphur Hub in the Lake Charles area. These assets represent approximately 53.5 million barrels of salt dome storage capacity, including 11.2 bcf of working natural gas storage capacity; significant brine supply infrastructure; and 240 miles of pipeline transportation assets, including the most extensive ethylene distribution system in Louisiana.

Boardwalk expects that the joint venture will fund this acquisition with proceeds from a $225 million, 5-year bank loan and equity contributions from Boardwalk and an affiliate of its general partner, Boardwalk Pipelines Holding Corp. (BPHC), which is a wholly-owned subsidiary of Loews Corporation (NYSE: L). BPHC will own 67% of the joint venture’s equity and Boardwalk will own 33% and, subject to modifications for any purchase price adjustments, are expected to contribute approximately $268 million and $132 million, respectively, to fund the acquisition. The acquisition is expected to close in late September or early October of 2012, subject to customary closing conditions, including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

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