NiSource Inc. (ticker: NI) said yesterday it will file a registration statement for an IPO of common units for a new MLP whose assets will consist of a 14.6% interest in CPG OpCo LP, which will own the natural gas transmission, midstream and storage assets of NiSource.
NiSource, through its wholly owned subsidiary Columbia Energy Group, will own the general partner of the MLP, all of its incentive distribution rights, and a majority of its limited partner interests following completion of the initial public offering. NiSource and its operating companies deliver energy to 3.8 million customers from the Gulf Coast through the Midwest to New England.
The NiSource spinoff provides the ability to raise capital to expand pipeline networks. Constraints on pipeline and other gas transmission infrastructure has created problems for producers of oil and gas, especially in the fastest growing basins, such as the Marcellus shale and the Bakken. NiSource has announced plans to spend about $8 billion to $10 billion over the next five to 10 years to expand and upgrade pipelines serving the Marcellus and Utica shale formations. Columbia Energy Group recently employed the services of GE and Accenture to increase the efficiency of pipeline downtime. That technology will make its debut on 15,000 miles of pipe in the Marcellus this winter.
According to data compiled by Bloomberg, more than 280 pipeline partnerships have gone public in the past decade, raising about $81 billion from initial offerings. MLPs pay no federal income tax, allowing them to send more profits to investors. The Alerian MLP Index is a group of 50 such partnerships. It “has gained 13 percent this year, almost twice the growth of the Standard & Poor’s 500 Index,” Bloomberg reported.
[sam_ad id=”32″ codes=”true”]
Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. The company or companies covered in this note did not review the note prior to publication. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.
