NiSource to spin off pipeline division
NiSource, the parent company of Columbia Gas, said today that it will spin off its pipeline division into a separate, publicly traded company that can better take advantage of the shaleenergy boom.
Indiana-based NiSource has about 8,800 employees, including about 2,200 in Ohio, most of them in the Columbus area. Some Ohio employees will go to work for the new company, Columbia Pipeline Group, but specifics were not immediately available.
“By creating two dynamic companies that can execute on their distinct business strategies, we expect to further sharpen each company’s customerservice focus, and maintain strong levels of local employment and community involvement, thereby further positioning us to create immediate and long-term value for our
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shareholders,” Robert C. Skaggs Jr., NiSource’s president and CEO, said in a statement.
There will be no job cuts related to the changes, spokesman Mike Banas said.
After the split, which will occur in mid-2015, the two companies will be as follows:
NiSource will continue to be based in Merrillville, Ind., and will include regulated utilities in seven states serving 3.4 million customers. It is listed on the New York Stock Exchange as NI.
Columbia Pipeline Group will be based in Houston and will include more than 15,000 miles of natural-gas pipelines, about 300 billion cubic feet of natural-gas storage capacity and a slate of gas-processing facilities. It will be listed on the New York Stock Exchange as COLP.
The split will enable Columbia Pipeline to raise money using a “master limited partnership,” an arrangement that will allow for tax savings compared to NiSource’s structure. Several other energy-infrastructure companies have done this.
Analysts long have speculated about potential changes for NiSource, including acquisition by another utility or a spinoff of the pipeline division. The company had said it was considering a master limited partnership.
The company’s pipeline assets have become more valuable because its utility territory happens to overlap with large parts of the Utica and Marcellus shale formations.
Many companies, including NiSource, have been pumping money into Ohio shale country to help build an infrastructure to process and transport natural gas.