Columbia Gas parent to spin off pipeline operations |
Local Stories

Columbia Gas parent to spin off pipeline operations

The parent company of Western Pennsylvania’s largest natural gas utility said Sunday it will split off its pipeline operations into a separate, publicly traded company.

Merrillville, Ind.-based NiSource said it did not expect the separation of Columbia Pipeline Group to affect employment levels at its operations, which include Columbia Gas of Pennsylvania. That utility has about 417,000 customers and 7,350 miles of pipe in 26 counties, including Armstrong, Allegheny, Beaver, Butler, Fayette, Washington and Westmoreland. NiSource has 3.4 million customers in seven states.

In a related announcement, NiSource said it would establish what’s known as a master limited partnership to help Columbia Pipeline raise cash. Similar moves have become popular among energy companies looking to get a piece of the shale gas boom. Downtown-based EQT Corp. and Cecil-based Consol Energy Inc. are among companies producing gas from the Marcellus and Utica shale that recently formed MLPs to operate what they call midstream assets.

Forming such a partnership provides tax advantages while allowing companies to generate investments in their pipeline, gathering and processing operations.

Columbia Pipeline will operate 15,000 miles of transmission lines and nearly 300 billion cubic feet of underground gas storage capacity once the separation is final next year, NiSource said.

Company officials planned to discuss the split further during an investor meeting Monday morning.

Columbia said last month it would spend $1.75 billion to build a pipeline and improve a line to move more natural gas from the growing Marcellus and Utica shale fields to Midwest and Gulf Coast markets.

The projects are set to come online in 2017. The 160-mile Leach XPress project will begin construction in 2016 in Ohio and West Virginia, with the goal of connecting gas wells to the company’s Columbia Gulf system in Leach, Ky., the following year. The Rayne XPress project will add capacity to Columbia Gulf, which extends to the Gulf Coast.

Producers that signed on for those pipelines include Fort Worth-based Range Resources, a dominant producer in Pennsylvania with a regional headquarters in Cecil, and Houston-based Noble Energy, a partner with Consol that is building a regional headquarters in Cecil.

David Conti is a staff writer for Trib Total Media. He can be reached at 412-388-5802 or [email protected].

TribLIVE commenting policy

You are solely responsible for your comments and by using you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.