Texas Gas Transmission LLC and Gulf South Pipeline Co. L formed Boardwalk Pipeline Partners to help each other grow faster.

Boardwalk Pipeline Partners LP, a new master limited partnership between Texas Gas Transmission LLC and Gulf South Pipeline Co. LP, says it will not offer any services beyond what its subsidiaries will provide.

But the potential growth for the new firm, which was formed by the Loews Corp. in 2005, is what makes the partnership attractive to all parties involved.

"One of the reasons we formed the master limited partnership is because it was a good vehicle to grow our companies,"explains Dean Jones, co-president of Boardwalk representing Texas Gas. "We're not offering any new services, but we're expanding our pipelines and storage fields through a number of initiatives."

Boardwalk offers interstate transportation and storage of natural gas. The company owns and operates two interstate natural gas pipeline systems with approximately 13,470 miles of pipeline. Boardwalk directly serves customers in 11 states and indirectly serves customers throughout the northeastern and southeastern United States through numerous interconnections with unaffiliated pipelines.

Its natural gas storage facilities are comprised of 11 underground storage fields located in four states with aggregate certificated working gas capacity of approximately 143 billion cubic feet (Bcf).

All of Boardwalk's operations are conducted through Texas Gas and Gulf South, at this time the company's only two subsidiaries. Texas Gas is composed of approximately 5,900 miles of pipeline that originate in the Louisiana Gulf Coast area and east Texas and run north and east through Louisiana, Arkansas, Mississippi, Tennessee, Kentucky, Indiana, Illinois and Ohio. The system has a peak-day delivery capacity of approximately 2.8 Bcf.

Texas Gas also has 31 compressor stations having an aggregate of approximately 531,000 horsepower. It owns natural gas reservoirs in nine underground storage fields located in Indiana and Kentucky, with storage capacity of approximately 178 Bcf of gas, of which approximately 63 Bcf is certificated as working gas.

Gulf South's system is located entirely in the Gulf Coast states of Texas, Louisiana, Mississippi, Alabama and Florida. The system includes approximately 7,570 miles of pipeline, with a peak-day delivery capacity of 3.5 Bcf of gas and 29 compressor stations having an aggregate of approximately 223,000 horsepower. Two natural gas storage fields in Louisiana and Mississippi have aggregate storage capacity of approximately 129 Bcf of gas.

"We don't take title to any gas in the pipeline," says Rolf Gafvert, Boardwalk co-president representing Gulf South. "Our customers run the gamut from the actual producer himself to industrial companies to distribution companies to marketing companies. We have a really diverse group of clients ranging from end-users to suppliers to intermediaries."

A Wanted Commodity
The high prices of fuel have forced customers to look for natural gas supplies in regions that are not known for gas, according to Jones. The search has moved into the Rocky Mountains, the mid-continent and Texas. Another issue in the same vein has to do with the storage of the newly discovered natural gas.

In response, Boardwalk announced two expansions of underground natural gas capacity. The expansions, with one completed in 2005 and another set for completion in 2007, are being used to take advantage of gas found in east Texas and Mississippi.

Boardwalk's assets are strategically located and it uses that strategic advantage when developing growth projects. Barnet Shale and Bossier Sands are now the largest producing regions in Texas. Currently, the pipeline take-a-way capacity from that region is limited, resulting in strong basis differentials.

In response to this opportunity to leverage its Gulf Coast assets, Boardwalk announced two pipeline expansion projects: East Texas expansion and Mississippi expansion. Both are 42-foot pipeline projects that will move 1.5 Bcf per day of natural gas originating from these production regions, backed by long-term agreements. The company also announced it is exploring opportunities to expand its new pipeline into the Florida market.

Jones says Boardwalk also is partnering with Energy Transfer Partners LP and ONEOK Partners LP on a proposed joint venture that would construct a new pipeline that would originate in north-central Texas and cross the states of Oklahoma and Arkansas, terminating in Coahoma County, Miss.

The proposed interstate pipeline would have initial capacity of up to 1 Bcf per day. Boardwalk says the three partners collectively bring value to the project.

Boardwalk has access to numerous markets in the Midwest, Northeast and Southeast through interconnects on Texas Gas and Gulf South. Energy Transfer and ONEOK have extensive intrastate pipelines and gathering assets in Texas and Oklahoma.

"Combining this broad range of experience is of critical importance, given the current competitive marketplace for the development of new interstate pipeline projects," Boardwalk said in a statement.

Organizational Structure
Because Loews Corp. is the majority stockholder in Boardwalk, the company has instant access to funding whenever a project calls for it. Gafvert says this is a key advantage Boardwalk holds over its larger competitors.

"We have speed and execution," he adds. "Because of our ownership with Loews, one of the things we do bring to the market is our projects are worked on and executed in a quick turnaround, which is important today."

Boardwalk went public in 2005. As a publicly traded MLP, it has access to a cheaper cost of capital. With the financial strength of Loews, Jones believes Boardwalk can execute any project it needs to grow.

"We want to be a much bigger company now that we have an opportunity to grow," Jones says. "We're fortunate to have the financial backing of Loews Corp. to assist us to accomplish anything that we set our minds to."

Another asset is Boardwalk's experience in the pipeline industry.

"What we experienced when automation came around is that we need less field people than before to run a pipeline," Jones says. "So there isn't a lot of hiring in the field, and the number of field employees is going down due to automation and technology."

The Federal Energy Regulatory Commission and the U.S. Department of Energy, according to Gafvert, heavily regulate training for employees. "They govern aspects of all pipeline operations, and they have strict regulations around training," Gafvert adds.

Internally, Boardwalk focuses on training its own employees on the merits of safety in the workplace. "We do a lot of safety training because it is important to the business," Jones adds.

About Texas Gas Transmission
Texas Gas Transmission says it has provided safe, reliable and cost-effective natural gas transportation and storage services to customers for more than 50 years. The company's customers include utilities, rural utility districts, energy-hungry industries and power generators.

"[They] know they can rely on the people of Texas Gas for responsive, personal service that meets their needs," Texas Gas says.

Texas Gas says all of its employees make safety a priority. Employee safety representatives teach, monitor and evaluate workplace safety year-round, and the company says its employee accident record is significantly lower than the industry average.

"From the president who begins each of his talks with a safety message to the experienced, certified operations and engineering personnel who monitor the pipeline around the clock, all take pride in maintaining the pipeline for secure, peak performance, year in and year out," the company says. "Working together, Texas Gas employees have earned a well-deserved reputation for operating one of the safest, most reliable pipelines in the industry." The company says it has a long history of effective relationships with customers, communities and regulatory agencies.

"While regulations, gas supplies and markets change, customers' expectations for dependable, economical gas storage and delivery remain constant," Texas Gas says. "Texas Gas works closely with its customers to make sure they get the natural gas they need, when they need it, at reasonable rates. "

Texas Gas says one of the main reasons for its success is its experienced personnel. The company says the best measure of employees' allegiance to the company is the average length of service, which is 19 years.

"Their dedication ensures a highly knowledgeable staff devoted to the success of Texas Gas and its customers," the company says.

About Gulf South
Gulf South offers a bevy of storage and transportation services for the natural gas industry. Its Bistineau Storage Facility, for example, is a depleted reservoir located about 25 miles southeast of Shreveport, La. The company says its total working gas capacity is 77.7 Bcf.

"The strategic location of Gulf South's storage facility and the availability of over 120 pipeline interconnects on Gulf South's system provide the storage customer with excellent access to major supplies and markets," Gulf South says. "The ability to inject or withdraw any day of the year allows maximum flexibility for the storage customer. Also, with Gulf South's interconnect to the Henry Hub, deliveries can be made to and from Bistineau, providing spreads for season load management."

For transportation, Gulf South offers firm transportation service (FTS), interruptible transportation service (ITS) and parking and lending (PAL) service.

FTS consists of the receipt of gas provided by a customer at a primary or supplemental receipt point, transportation through Gulf South's system, and the delivery of gas by Gulf South to the customer's account at a primary or supplemental delivery point, the company says. Primary receipt and delivery points are established as part of the contracting process.

ITS is the receipt of gas provided by a customer at any receipt point of Gulf Coast's system, transportation through Gulf South's system and the delivery of gas by Gulf South to the customer or for the customer's account for any delivery point on the company's system.

PAL is an interruptible service where customers may either park or borrow gas, Gulf Coast says. Parking service provides a customer the ability to deliver gas onto Gulf South's system for redelivery at a future date. "PAL service is designed to assist customers with their short-term balancing needs," the company says. "This service has the lowest scheduling priority of all the transportation services."