$285 Million Purchase by Boardwalk Pipeline Partners LP
The remaining 80 percent stake in Boardwalk HP Storage Company LLC worth $285 million was finally purchased by Boardwalk Pipeline Partners LP (BWP) from Boardwalk Pipelines Holding Corporation. The acquired company operates 7 natural gas storage caverns in Mississippi, with approximate total storage capacity of around 29 billion cubic feet, and also includes undeveloped land which can hold an additional 6 facility capacity.
According to Boardwalk President and CEO Stan Horton, purchasing the remaining ownership interest in Boardwalk HP Storage was one of the key goals of the company for 2012 and Boardwalk has been in control of these assets since its acquisition last December 2011 and the transition has turned out very successful.
There was an agreement reached between Enterprise Products Partners and Boardwalk Pipeline for the former to sell the latter its Mississippi natural gas storage facilities in the amount of $550 million in a joint venture with Boardwalk Pipeline controlling 20 percent equity. Last month, Boardwalk Pipeline saw its fourth quarter earnings dip by 16 percent attributed to mild winter weather.
BWP stock is probably going to face an important test soon. Its current long-term graph shows lower highs of $38.50 in March 2007 and $34.08 in October 2010. The stock is currently trading at $27.64 and has short-term support line at $24.11. To establish an uptrend, it should surpass the $34 figure. If it falls below $24, it would be a major downtrend indication for Boardwalk Pipeline Partners LP.