Energy holding company, NiSource Inc.’s NI subsidiary, Columbia Pipeline Group, Inc. has received the board of director’s approval for a combined future investment of $2.7 billion in a couple of new infrastructure projects. Mountaineer XPress and Gulf Xpress projects are expected to accommodate increasing gas supplies from the Marcellus and Utica shale regions.
The two projects will provide midstream facilities from Marcellus and Utica production areas to the markets served by NiSource’s units – Columbia Gas Transmission and Columbia Gulf Transmission. They’ve secured long-term, firm transportation contracts from various players in the Marcellus and Utica plays.
Mountaineer Xpress
Proposed around the fourth quarter of 2014, Mountaineer Xpress will have a 165-mile long pipeline and an expansion of the existing WB Line of Columbia Transmission. The project will support a firm transportation capacity of 2.7 billion Bcf/d from current and new terminals of receipt along or near Columbia Transmission's system. The project will operate in close proximity to the third party processing plants in the Appalachian region.
Gulf Xpress
The project will include installation of compression to existing and new stations along Columbia Gulf's system as well as provide limited pipeline looping, system modifications and related facilities. Gulf Xpress will transport approximately 860,000 Dth/D from Leach, KY to the Columbia Gulf Mainline Pool and other points in Rayne, LA.
Other Details
These projects will be designed and constructed with proper safety measures. It will also hugely benefit the local community by enhancing energy infrastructure and creating hundreds of construction jobs. The new pipelines will significantly increase Columbia Pipeline’s present infrastructure to transport gas from the Ohio, Pennsylvania and West Virginia production areas.
The projects are yet to be reviewed by the Federal Energy Regulatory Commission for environmental comprehensiveness and transparency. It is anticipated that Mountaineer XPress and Gulf Xpress projects will be placed into service by the fourth quarter of 2018.
Columbia Pipeline Group Spin-Off
NiSource’s prior announcement to spin off Columbia Pipeline Group is now expected to materialize on Jul 1, 2015. Columbia Pipeline Group will be a part of the S&P 500 index by replacing Allegheny Technologies Inc. ATI.
Post separation, NiSource will become a pure-play, fully regulated, natural gas and electric utility while Columbia Pipeline Group will become a pure-play natural gas pipeline, midstream and storage company.
Zacks Rank
NiSource is currently well placed with a Zacks Rank #2 (Buy). Other stocks worth considering in the utility space are CMS Energy Corp. CMS and Alliant Energy Corporation LNT, also carrying a Zacks Rank #2.
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