Columbia Pipeline Group (CPG), a unit of diversified utility
), announced fresh investments of $1.75 billion to strengthen its
existing pipeline infrastructure. The objective is to construct new
pipeline projects and transport additional volumes of gas produced
by natural gas producers in western Pennsylvania, northern West
Virginia and eastern Ohio.
The investment will involve construction of the Leach XPress
project, a new 160 mile natural gas pipeline in Ohio and West
Virginia by Columbia Gas Transmission (Columbia Transmission). The
Leach XPress project will boost the natural gas transportation
capacity of the company by 1.5 billion cubic feet per day (Bcf/d).
This new pipeline has already booked long-term firm service
contracts with Range Resources - Appalachia, LLC, a unit of Range
Resource Corporation (
), Noble Energy, Inc. (
), Kaiser Marketing Appalachian, LLC and American Energy Utica -
Another project from Columbia Gulf Transmission (Columbia Gulf) -
the Rayne XPress project - will provide additional capability for
more than four shippers to transport Appalachian production to the
markets via Columbia Gulf. This new project is also supported by
long-term shipping agreements.
Long-term service agreements make these pipeline projects viable as
construction of these pipelines involves huge initial capital
investments for the company. The construction work on the projects
is expected to start in the second half of 2016 and commercial
operation is slated for the second half of 2017.
We believe the increasing regulation on coal usage, clean burning
nature of natural gas and new drilling techniques have resulted in
booming natural gas production and usage. This also requires
efficient midstream services for the transportation of natural gas
to refiners and storage units and ultimately to their end markets.
Columbia Gas Transmission and Columbia Gulf Transmission are part
of the Columbia Pipeline Group. NiSource currently holds a Zacks
Rank #3 (Hold). A better ranked stock in the same space is ALLETE,
) carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
RANGE RESOURCES (RRC): Free Stock Analysis
NISOURCE INC (NI): Free Stock Analysis Report
NOBLE ENERGY (NBL): Free Stock Analysis Report
ALLETE INC (ALE): Free Stock Analysis Report
To read this article on Zacks.com click here.