On April 1, Boardwalk Pipelines (BWPL) announced a non-binding open season for Borealis, a 2 Bcf/d expansion of the Texas Gas Transmission (TGT) system that would open new markets for Marcellus and Utica gas. If successful, the project could change the outlook for many Northeast assets.
BWPL proposes to build a greenfield line extending from existing infrastructure in Lebanon, OH to Clarington in eastern Ohio. Clarington is a major supply hub for Appalachian gas, connecting pipelines like Rockies Express, Texas Eastern, Rover, and Eastern Gas Transmission (see the pipeline map from East Daley Analytics’ Energy Data Studio). The project scope includes other modifications to TGT facilities to expand capacity south to the Gulf Coast.
Borealis could transform the regional market. Despite abundant gas resources, EDA currently forecasts constraints on Marcellus/Utica growth due to limited takeaway. Near-term production growth is marginal, supported by increasing in-basin consumption until Williams (WMB) expands the Transcontinental Gas Pipe Line (Transco) later this decade.
The open season also invites bids to extend the project upstream and connect directly to Marcellus and Utica supply sources. Operators could then secure the egress capacity required for a step-change in production.
Boardwalk gave no timeline to complete Borealis, but EDA speculates that a project of this size and in this geography could be delivered by the end of the decade. Egress projects out of the Northeast carry elevated risk, as shown by the challenges faced by Mountain Valley Pipeline and other canceled projects.
Borealis comes on the heels of Boardwalks’ final investment decision (FID) for the Kosci Junction project, which will extend the existing Greenville lateral on Texas Gas to Clark County, MS and deliver up to 1.6 Bcf/d of gas into Transco Station 85. Taken together, the projects would directly connect the Clarington hub to the premium Station 85 market for the first time, adding value to the TGT asset.
Boardwalk’s momentum could help other Northeast G&P operators, including Antero Midstream (AM), DT Midstream (DTM), MPLX and WMB. BWPL is also an increasingly interesting market participant given the strategic opportunities within its footprint and improving company financials. With its debt-to-EBITDA ratio falling from 4.2 in 2020 to 2.8 in 2024, BWPL has placed itself in a strong financial position to grow its asset base or explore sale and IPO opportunities. – Zach Krause Tickers: AM, DTM, MPLX, WMB.
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