Boardwalk Pipeline Partners LP (BWP) and its general partner have agreed to acquire PL Midstream LLC from PL Logistics LLC for $625 million in cash, as the oil and gas transporter company looks to diversify into industries that complement its core natural gas pipeline and storage businesses.

PL Midstream provides salt-dome storage, pipeline transportation, fractionation and brine supply services for producers and consumers of petrochemicals, natural gas liquids and natural gas through southern Louisiana. Boardwalk said the company's assets are strategically located to participate in the petrochemicals boom in the U.S. Gulf Coast region.

"This acquisition enables Boardwalk to enter the natural gas liquids business with strategically-located and well-contracted assets and a strong, experienced management team," said Boardwalk President and Chief Executive Stan Horton.

Boardwalk said it has formed a joint venture with an affiliate of its general partner, Boardwalk Pipelines Holding Corp., to acquire the midstream company. Boardwalk Pipelines Holding, which is a Loews Corp. (L) unit, will have a 67% stake in the joint venture, while Boardwalk will own 33%. The companies are expected to contribute about $268 million and $132 million, respectively, to fund the acquisition. Boardwalk also expects the joint venture to fund the acquisition with proceeds from a $225-million bank loan. The deal is expected to close in late September or early October.

Boardwalk has expanded its pipeline network in the shale-gas regions of the Southeast, driving gas-transportation revenue higher over the past year, though an unseasonably warm winter has recently cut into profits.

Last month, Boardwalk reported its second-quarter earnings quadrupled from a year-earlier period weighed down by a large impairment charge as lower natural gas prices contributed to less-than-expected revenue.

Shares were up by nine cents to $27.18 after hours. The stock has fallen 2.1% since the start of the year.

Write to Nathalie Tadena at nathalie.tadena@dowjones.com