Boardwalk Pipeline Partners, LP (BWP) Wants You Back

The Dow Chemical Company (NYSE:DOW) isn’t the only petrochemical company investing heavily in the Gulf. Chevron Corporation (NYSE:CVX) has made similar news with plans for its 50%-owned, chemical joint venture, CP Chem, to spend about $5 billion for an ethane cracker and two polyethylene units. While chemicals are just a small portion of its overall revenue, this still represents a large project for the company.

For Dow and Chevron Corporation (NYSE:CVX) these projects are about driving margin expansion and growth as both companies are aiming to take advantage of North American shale gas production. The access to that advantaged feedstock gives both companies a leg up on competitors across the globe because the price of natural gas in the U.S. is so much less than it is overseas. Pipelines help to keep the cost of these NGLs down as the other transportation options, such as trucks and trains, are much more expensive.

That’s where Boardwalk Pipeline Partners, LP (NYSE:BWP) and Williams are playing a key role. Through this venture the two are linking two liquids-rich-resource plays to the expanding petrochemical industry in the Gulf. In so doing it will benefit both producers and the petrochemical end users while the two “middlemen” also stand to profit. Overall, this venture is a good move for Boardwalk as it works to win back investors by securing growth-oriented projects so that it can restart its distribution growth.

The article Boardwalk Wants You Back originally appeared on Fool.com and is written by Matt DiLallo.

Fool contributor Matt DiLallo owns shares of Enterprise Products Partners L.P. (NYSE:EPD). The Motley Fool recommends Chevron and Enterprise Products Partners L.P.

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