Tuesday, May 31, 2011

Boardwalk Partners prices public offering of six million common units

NEW YORK - Boardwalk Pipeline Partners, LP (NYSE: BWP) on May 27 announced that it priced the public offering of 6,000,000 common units at $29.33 per unit. Boardwalk expects the offering to close on June 2.

Boardwalk has granted the underwriters a 30-day option to purchase up to an additional 900,000 common units.

In connection with the offering, Boardwalk will receive net proceeds after offering expenses of approximately $173.5 million, including the general partner's proportionate capital contribution of $3.6 million to maintain its two percent general partner interest. Boardwalk expects to use the net proceeds from the offering, together with the amounts contributed by its general partner, to repay borrowings outstanding under the Partnership's revolving credit facility but may use some or all of the proceeds for general partnership purposes, including retirement of other long-term debt.

Barclays Capital, BofA Merrill Lynch, Citi, J.P. Morgan and Wells Fargo Securities are acting as joint book-running managers for the common unit offering. (Source: Business Wire, May 27, 2011)

Enterprise Products sells Energy Transfer units

HOUSTON, Texas - Oil and gas distributor Enterprise Products Partners LP said on May 23 that it expects to raise $169 million from a subsidiary's sale of 4.45 million units of Energy Transfer Equity LP.

The Houston company said it would use the money for general purposes including capital projects.

El Paso to split pipeline, exploration groups Into separate companies

HOUSTON - Energy company El Paso Corp. said on May 24 that it plans to separate into two publicly traded businesses by the end of the year.

The Houston company's stock jumped $1.18, or 6.2 percent, to $20.16 in afternoon trading.

The El Paso board approved plans to spin off its exploration and production business to its shareholders. The company said its shareholders would get a pro rata share of the stock in the spinoff company although specific terms were not disclosed.

The separation is subject to market, regulatory and tax approvals as well as final approval by the El Paso board.

After the spinoff, El Paso Corp. will include its pipeline group, its midstream group and its general and limited partner interests in El Paso Pipeline Partners LP. Doug Foshee will remain chairman and CEO.

The new publicly traded exploration and production business will be led by the unit's president, Brent Smolik, as CEO. Foshee will be non-executive chairman.

El Paso said the deal would give managers the opportunity to focus "on distinct business strategies" appropriate for each of the resulting companies, more flexibility to grow each of the businesses and improved capital markets access.

Friday, May 27, 2011

Rainbow Pipeline segment shut in by wildfires restarts in northern Alberta

CALGARY, Alta. - Oil and gas activities in northern Alberta began returning to normal as the number of forest fires in the region abated and the Plains All America Rainbow Pipeline resumed partial operations.

Power to Alberta's Slave Lake region, decimated by wildfires fanned by strong winds, has been restored, allowing pumping stations and pipelines to resume operations.

Operator Plains Midstream Canada, a subsidiary of Plains All American Pipeline, restarted the southern portion of its Rainbow Pipeline on the afternoon of May 25, a day later than expected, after being shut down since May 15.

"The line has been closed for the past 10 days as a precautionary measure due to the threat from forest fires in the area," said vice president Stephen Bart.

The Nipisi-to-Edmonton segment of the pipeline was flowing at about 136,000 b/d, an average rate for current supply and demand conditions, said Bart. More than 150,000 b/d of heavy oil production in north central Alberta were shut down because of fires and power interruptions.

The northern portion of the Rainbow Pipeline, running from Zama to Nipisi, remained closed after a late April rupture that spilled 28,000 barrel of oil in the muskeg. Cleanup operations restarted on May 25 after workers were evacuated five days before due to fires in the area. The pipeline remains closed pending restart approval from provincial regulators.

Thursday, May 26, 2011

Enbridge's Wuori argues that Northern Gateway needed to diversify markets

CALGARY, Alta. - Steve Wuori, in the keynote speech on May 18 at Calgary Economic Development’s 2011 Report to the Community, said Canada has one market, one customer, which is the United States.

The reliance on the United States as its main market is facing challenges, added Wuori. United States demand peaked between 2005 and 2007 and has been declining since. There is also rising domestic production in the United States. Also there is a drive to convert the American heavy truck fleet to natural gas. Other challenges include a growing opposition to the oilsands and a growing production of ethanol south of the border.

Enbridge has proposed its Northern Gateway project between Edmonton and Kitimat - a $5.5 billion, two parallel pipeline project of 1,900 kilometers - which would diversify the market to include Asia and the Pacific Rim markets.

Wuori said the project would be a "game-changer" for Canada because of the unlocking of various new markets - leading to a $2-3 per barrel increase in the price paid for its oiloil, a $270-billion increase in national GDP over 30 years, 63,000 person years of employment during construction, $4.3 billion in labor-related costs and income for people, and about 1,150 long-term jobs once Northern Gateway is in operation.

Wednesday, May 25, 2011

Feds clear Cheniere Energy's bid to export LNG

HOUSTON, Texas - Cheniere Energy (NYSE AmEx: LNG) received approval on May 20 from the Department of Energy to export U.S. natural gas overseas, the first such authorization in over 40 years, the company announced.

Assuming Cheniere is granted a subsequent license from U.S. power regulators to build its liquefaction plant in Louisiana, it may become the first company to begin shipping LNG abroad since the discovery of vast shale reserves in recent years upended the U.S. market, flooding it with decades' worth of supply.

Cheniere has the authorization to export up to 803 billion cubic feet of natural gas per year to major LNG importers across the globe, from Brazil to Japan, in the form of liquefied natural gas, the company’s news release said.

Houston-based Cheniere already had approval to export natural gas to countries with which the United States has a free-trade agreement, a group that excludes almost every major importer, countries such as Spain, Korea and the UK. Friday's move opens up the export to all major LNG importers.

Tuesday, May 24, 2011

North Dakota Public Service Commission orders probe of oil pipeline leak

BISMARCK, N.D. - State regulators have opened a formal investigation of an oil pipeline accident in southeastern North Dakota. A fitting failure at a pumping station in TransCanada Corp.'s Keystone pipeline spilled more than 14,000 gallons of oil.

North Dakota's Public Service Commission voted on May 13 to investigate the accident.

Commission Chairman Tony Clark said the move allows the commission to take testimony and gather evidence about the accident. It also allows North Dakotans who are interested in the spill to take part in the case.

The pipeline was shut down when the spill happened on May 7.

The oil release happened at the TransCanada Ludden Pump Station.

The oil spill was caused by a damaged three-quarter-inch fitting, and TransCanada has re-inspected all similar fittings at all of its pump stations in the United States and Canada, installing stronger fittings where appropriate, the company said.