HATTIESBURG and PETAL — Boardwalk HP Storage Company, LLC, a Houston, Texas-based joint venture between Boardwalk Pipeline Partners and Boardwalk Pipelines Holding Corp. (BPHC), an affiliate of its general partner, has completed the previously announced acquisition of Petal Gas Storage, LLC, Hattiesburg Gas Storage Company and related entities from Enterprise Products Partners, LP.
The joint venture funded the acquisition with proceeds from a $200 million bank loan and equity contributions from BPHC and Boardwalk. BPHC, a wholly-owned subsidiary of Loews Corporation, owns 80 percent and contributed approximately $280 million of the joint venture’s equity while Boardwalk owns 20 percent and contributed approximately $70 million. Boardwalk will operate these assets on behalf of the joint venture.
Petal and Hattiesburg operate seven high deliverability salt dome natural gas storage caverns in Forrest County, having approximately 29 billion cubic feet (Bcf) of total storage capacity, of which approximately 19 Bcf is working gas capacity. Petal and Hattiesburg also own undeveloped land that is suitable for up to six additional storage caverns, one of which is expected to be placed in service in 2013.
The acquired businesses also include a leaching plant, freshwater and brine disposal wells, approximately 69,000 horsepower of compression and approximately 105 miles of pipeline which connect their facilities with several major natural gas pipelines, including Boardwalk’s. The storage capacity of the operating caverns is currently fully subscribed under long-term fixed-fee contracts with a weighted-average remaining contract life of approximately seven years.
Boardwalk Pipeline Partners operates approximately 14,300 miles of pipeline and underground storage fields having aggregate working gas capacity of approximately 186 Bcf.