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TheStreet Open House

Williams And Boardwalk Sign Joint Venture Agreements For Proposed LPG Export Terminal

TULSA, Okla. and HOUSTON, Oct. 1, 2013 /PRNewswire/ -- Williams (NYSE: WMB) and Boardwalk Pipeline Partners, LP (NYSE: BWP) today announced they have executed joint venture agreements to continue developing a liquefied petroleum gas (LPG) export facility in the Lake Charles, La. area. The proposed Moss Lake LPG Terminal would be located on the Calcasieu River and serve tanker ships transporting LPG to Asian, Latin American and European markets.

(Logo: http://photos.prnewswire.com/prnh/20130521/MM18411LOGO)

The terminal is being designed to store 900,000 barrels of fully refrigerated propane and butane with a load-rate of 25,000 barrels per hour.  Williams and Boardwalk are currently working with a number of parties to reserve off-take capacity at the terminal.   

If completed, the terminal would facilitate the export of a portion of the propane and butane components of the natural gas liquids (NGLs) transported on the proposed Bluegrass Pipeline and separated at the Moss Lake Fractionation plant, both of which are also being developed by a joint venture between Williams and Boardwalk.

Based on current market conditions, producers should benefit from the option to export propane and butane, which constitute approximately 30 percent of the liquids in an average NGL barrel. The other  NGL components – ethane, isobutane and natural gasoline –are expected to serve demand among U.S. industries, manufacturers and refineries.

The proposed Moss Lake LPG Terminal, Moss Lake Fractionation Plant and Bluegrass Pipeline represent critical infrastructure designed to support the ability of producers to economically develop the resources in the Marcellus and Utica shale-gas areas. The Bluegrass Pipeline would transport the NGLs associated with natural-gas production from Marcellus and Utica producing areas to the petrochemical complex on the U.S. Gulf Coast and markets at points in between. The Moss Lake Fractionation Plant near Lake Charles, La. would consist of storage facilities and a new, large-scale fractionation plant to separate NGLs into component products. 

"In addition to the variety of domestic markets that would be served by the Bluegrass Pipeline and Moss Lake Fractionation projects, Moss Lake LPG would offer our customers access to attractive global markets for propane and butane, which in turn allows for continued production of natural gas, crude oil and other products that are integral to helping the U.S. gain its energy independence," said Stan Horton, president and chief executive officer of Boardwalk. "Taken together, these critical infrastructure projects allow for the efficient movement of NGLs to domestic and global markets and support the development of the United States' own energy resources and the renaissance in America's job-producing manufacturing complex."

"Formalizing the joint venture agreements for the Moss Lake LPG Terminal further demonstrates Boardwalk's and Williams' commitment to meeting the needs of producers by providing multiple markets for the prolific NGL supplies in the Marcellus and Utica shale plays," said Jim Scheel, senior vice president of corporate strategic development at Williams. "In addition to the many domestic markets that our Bluegrass Pipeline and Moss Lake Fractionation projects would offer to U.S. producers of NGLs, we are pleased to offer an export option so our customers would have access to the highest-value markets for all of the components of the NGL barrel."

Sanctioning and completion of this project, including the Bluegrass Pipeline, Moss Lake Fractionation project and Moss Lake LPG, is subject to, among other conditions, execution of customer contracts sufficient to support the project and the parties' receipt of all necessary approvals, including board and regulatory approvals. In addition, each of the parties has the right, under certain circumstances, to withdraw from the project or from portions of the project, in which case the project may be terminated, only portions of the project may be completed, or the parties respective ownership interests in the project may change. Williams and Boardwalk cannot give assurances that this project will be completed, in whole or in part. However, if all conditions are satisfied and the parties elect to construct the facilities described above, the project could be placed into service in late 2015.

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