NiSource Inc.’s (NI - Analyst Report) business division NiSource Midstream Services announced the commencement of service from its Big Pine Gathering facility in support of the long-term gathering agreement with XTO Energy Inc. NiSource Midstream is an affiliate of the company’s Columbia Pipeline Group (CPG).
The entire Big Pine system came online in Apr 2013 providing an outlet for Marcellus shale production in western Pennsylvania. It is a 57-mile, 20-24 inches gathering system situated at the center of the Marcellus formation. The facility spans across the hydrocarbon endowed counties of Alleghany, Butler, Armstrong, Indiana and Westmoreland.
The Big Pine system offers gas gathering and residual gas takeaway services to natural gas operators. It is linked to CPG’s Columbia Gas Transmission, the Texas Eastern Transmission and Dominion Transmission complexes. NiSource’s timely execution of the project will allow the company to meet the needs of the Marcellus producers by delivering natural gas to their chosen markets.
With this midstream initiative, the company hopes to find more investments for further development of the Big Pine system. In fact, NiSource has already found an investor, Penn Energy into the venture and recently inked an individual gathering agreement with Penn.
Of late, the company has increased its focus on the expansion of its various midstream programs. Besides Big Pine NiSource’s other notable project, the Pennant pipeline and processing system is nearing completion and will further boost its transmission capabilities.
Meanwhile, the company is also seeking options to expand its transmission footprint in Northern Indiana. We believe the current shale gas explosion in the U.S. will complement NiSource's varied midstream ventures.
Total natural gas consumption is expected to increase considerably in the future driven majorly by the industrial and power sectors. Industrial sector's gas usage will climb by 14.7% in 2025 from the 2011 level while share of power generation will jump to 27% in 2025 as per the Energy Information Administration. This will certainly bode well with NiSource’s broad future growth objectives.
At present, the company holds a Zacks Rank #2 (Buy). Other industry counterparts currently placed well are Zacks Ranked #2 Ameren Corporation (AEE - Analyst Report) , ALLETE Inc. (ALE - Snapshot Report) and DTE Energy Company (DTE - Analyst Report) .
Based in Merrillville, Ind., NiSource together with its subsidiaries provides natural gas, electricity, and other products and services in Ohio, Pennsylvania, Virginia, Kentucky, Maryland, Indiana, and Massachusetts.