Lower-than-normal pressures before pipeline anomaly remediation and temporary pipeline shutdowns during the remediation drove an 8% decrease in its earnings to $106.9 million in 3Q2009 compared with $116.1 in 3Q2008, Houston-based Boardwalk Pipeline Partners said Monday.
While transportation revenues (excluding fuel) from expansion projects were approximately $47 million less than anticipated, all of the expansion projects are now operating at normal operating pressures, CEO Rolf Gafvert said during a conference call with analysts Monday. Net income of $18.8 million in 3Q2009 was down 74% from $73.6 million in 3Q2008.
Boardwalk, which had made “substantial progress” addressing anomalies on its East Texas Pipeline, Southeast Expansion and Gulf Crossing projects during 2Q2009 (see Daily GPI, July 28), recently filed with the Pipeline and Hazardous Materials Safety Administration (PHMSA) for a special permit to operate those 42-inch diameter projects at higher-than-normal operating pressures, Gafvert said.
In late June Boardwalk said its 356-mile Gulf Crossing Pipeline had completed remediation of pipe anomalies and had been given the green light by the Department of Transportation to operate the pipeline at normal operating pressures of up to 72% of the specified minimum yield strength (see Daily GPI, July 1).
Boardwalk subsidiary Texas Gas Transmission’s Fayetteville and Greenville laterals provide takeaway capacity from the Fayetteville Shale play in north-central Arkansas. The Fayetteville Lateral is the larger of the two, extending 166 miles from Grandview, AR, in Conway County to an interconnection with Texas Gas’ existing mainline system. In April FERC approved Texas Gas’ request to expand compression to boost capacity on the Fayetteville Lateral to 1.3 Bcf/d from approximately 800 MMcf/d, and to boost the capacity of the Greenville Lateral in Mississippi to 1 Bcf/d from 770 MMcf/d (see Daily GPI, April 17).
Boardwalk has begun testing on the Fayetteville Lateral, which must be completed before it seeks PHMSA approval to operate at higher operating pressures, Gafvert said. The testing “could take several months,” he said. Earlier this month Boardwalk and Texas Gas completed remediation of pipe anomalies on the Fayetteville and Greenville laterals and received authorization from PHMSA to operate them at standard operating pressures (0.72 of the Specified Minimum Yield Strength) (see Daily GPI, Oct. 12). Boardwalk expects to complete the projects in 1Q2010, Gafvert said.
“By adding compression we expect to increase our peak day delivery capacity to 1.7 Bcf/d for Gulf Crossing and 1.3 Bcf/d for the Fayetteville lateral, both subject to PHMSA approval,” Gafvert said. “We also expect to increase the peak day capacity for the Greenville Lateral to 1 Bcf/d, which does not require a special permit from PHMSA.”
In July Boardwalk’s Gulf South Pipeline Co. LP completed remediation of anomalies on its East Texas and Southeast pipeline projects and received authorization to operate them at standard operating pressures (see Daily GPI, July 29).
Boardwalk spent $630.8 million on expansion and growth capital expenditures in the first nine months of 2009, including $283.1 million on the Fayetteville and Greenville laterals and $215.6 million on the Gulf Crossing project.
©Copyright 2009Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |