Southwestern Renegotiates Firm Transportation Service Agreements With Boardwalk

(RTTNews) - Southwestern Energy Co. (SWN) said it has signed an amended transportation agreement with Boardwalk Pipeline Partners LP's (BWP) subsidiary, Texas Gas Transmission, LLC, for a portion of its Fayetteville firm takeaway capacity. This is subject to approval from the Federal Energy Regulatory Commission or FERC.

This new agreement is effective November 1, 2017 and is expected to provide savings of about $70 million from 2017 through 2020. This includes about $45 million in savings in 2018 through the reduction of current excess capacity, while guaranteeing future flexible takeaway capacity through 2030 at competitive rates.

Southwestern Energy noted that one of the key components of this amended agreement include that it provides right-sized, fixed rate, guaranteed long-term takeaway capacity and future option capacity to highly sought after gulf coast markets.

It will also reduce Fayetteville Lateral volume commitment from 800,000 MMBTU per day to 100,000 MMBTU per day in November 2017 through October 2020 at existing rates.

In addition, it provides for restructured firm transportation agreements and demand fees beginning in 2021 at approximately $0.10 per MMBTU, and firm transportation agreements for up to 800,000 MMBTU per day starting in 2021 and decreasing each year.

In a separate statement, Boardwalk Pipeline Partners said that its Texas Gas Transmission Company subsidiary has filed with the FERC seeking approval to restructure some of its existing firm transportation agreements and enter into new firm transportation agreements with subsidiaries of Southwestern Energy on Texas Gas' Fayetteville and Greenville Laterals.

"The restructuring of Southwestern's transportation agreements helps Texas Gas achieve greater long-term revenue generation. It also provides future revenue upside through Southwestern's volume commitment of flowing gas from the Fayetteville and Moorefield plays," Stan Horton, Boardwalk's president and CEO said.