Lawsuits Begin re Columbia Gas Boston-area Pipe Explosions

Last Thursday a major accident occurred 25 miles northwest of Boston when natgas delivery pipelines owned by Columbia Gas (NiSource) in three communities exploded and caught fire at more than 80 locations (see Local NatGas Pipes Explode Near Boston Killing 1, Injuring 25). The explosions and resulting fires tragically killed one teenager and injured some 25 others. Local officials ordered some 8,600 residents and businesses in the three communities to evacuate–until Sunday. A major incident. The ramifications of this situation will go on for years. Columbia Gas immediately pledged to replace all of the pipelines feeding homes and businesses in the three communities in the coming weeks and months. We expect it will be months before gas service is back online. In what is a worthy response (as well as good PR), Columbia yesterday pledged to donate $10 million to the the Greater Lawrence Disaster Relief Fund to assist families affected by the blast. Our immediate thought was, “While this is a welcomed first step, don’t for a minute think Columbia is getting off cheap. The lawsuits haven’t even begun. In the end, this episode will cost Columbia, at a minimum, hundreds of millions. Maybe over $1 billion. $10M is chump change.” And by golly, a few minutes later we spotted a story that the first class action lawsuit has just been filed. It’s the first of what likely will be many…
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Local NatGas Pipes Explode Near Boston Killing 1, Injuring 25

You don’t often think of the safety of the pipeline network that delivers natural gas to your home or business because it’s so rare there are any problems with it. When’s the last time you heard about a local delivery pipeline exploding? Last Thursday a major incident occurred 25 miles northwest of Boston when delivery pipelines owned by Columbia Gas (NiSource) in three communities–Andover, North Andover and Lawrence–exploded and caught fire at “more than 60 locations.” The explosions and resulting fires tragically killed one teenager and injured some 25 others. Local officials ordered over 8,000 residents and businesses in the three communities to evacuate, turning off electric and gas. Each house and business was then tested before turning electricity back on (gas is still off). Residents were finally able to return to their homes on Sunday. It’s a huge incident, a big, fat, stinking mess. Folks waited in lines for hours at claims centers to file requests for reimbursement for hotels and expenses after being displaced from their homes–only to have the claims centers close because Columbia couldn’t handle the numbers. On Friday, Massachusetts Gov. Charlie Baker declared a state of emergency in the three communities. Later in the day on Friday, he invoked a little-used (and little-known) provision in the state constitution that allowed him to take management of the crisis away from Columbia/NiSource, giving management of the crisis to a competitor, Eversource. Although it’s still early in the investigation process, the cause of the explosions appears to be a combination of old/decaying pipes with too much pressure flowing through them. Attention has turned to pressure sensors along the pipelines. Yesterday Columbia/NiSource announced it will replace all 48 miles of the cast iron and bare steel pipeline system in that area. Meanwhile, the affected 8,000+ residents and businesses will not have gas service restored “for weeks” at a minimum…
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M-U Companies Collaborate with Eco Group on Pipeline Report

Over the years the Nature Conservancy, whose mission is “to conserve the lands and waters on which all life depends,” has put its support behind restrictive, anti-drilling measures. However, they’re not typically one of the Big Green groups that actively goes out of its way to block all fossil fuel extraction. They’re not as bad as the Sierra Club, or NRDC, or Earthworks. In what is perhaps a new chapter in cooperation with the industry (sure to get them tossed off the Christmas card list by other Big Green groups), the Nature Conservancy worked with eight of the largest pipeline companies in the U.S. (all but one with operations in the Marcellus/Utica) to produce a report titled, “Improving Steep-Slope Pipeline Construction to Reduce Impacts to Natural Resources” (full copy below). The report’s aim is to provide a list of best practice aimed at reducing the environmental impacts of natural gas pipeline construction. Particularly in areas prone to landslides. Working with Nature Conservancy on the report was Dominion Energy, Enbridge, EQT Midstream Partners, Kinder Morgan, NiSource, Southern Company Gas, UGI Energy Services and Williams–all of which have committed to adopting the guidelines put forth in the report. Notice that Nature Conservancy’s approach is not “never build another pipeline again”–as it is for most Big Green groups (including the ones we listed above). Instead, Nature Conservancy worked with pipeline companies to develop standards and practices that will protect the environment, while still allowing for pipeline construction. That is, they are being reasonable. Hats off to the Nature Conservancy for their efforts and reasonableness. Unfortunately for them, they are now sure to be ostracized by their Big Green brethren…
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Columbia Gas Customers in OH Start Using M-U Gas in April

We often write about pipeline projects in the Marcellus/Utica and their mission to move our prodigious natgas production to new markets where the gas will fetch a higher price. Last fall MDN provided a list of 15 active pipeline projects in our region, aimed at moving our gas to new markets (see List of 15 Active Marcellus/Utica Pipeline Projects Worth $23B). However, sometimes the “new” markets these pipelines serve are located–right here, in the M-U region! That’s right. Not all gas needs to go to the South, the Southwest, Midwest or get exported to Canada and beyond. Sometimes new market demand is hidden in plain sight. Such is the case for Columbia Gas (owned by NiSource) in Ohio. The company said it has “changed our portfolio around” to source locally extracted Marcellus/Utica gas for “at least 40%” and “likely much more” of the gas it sells to its customers. The change to using Marcellus/Utica gas will begin in April. Among the pipelines that will flow the M-U gas Columbia will buy is the recently completed Leach XPress (see Leach XPress Goes Online; FERC Approves Mountaineer & Gulf XPress). Here’s the good news that our own gas will serve those in our own region…
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NiSource 1Q16: The Gas & Electric Business is Quite Profitable

NiSource service area
NiSource service area

NiSource and Columbia Pipeline split up last summer (see NiSource/Columbia Pipeline Divorce is Final). Columbia retained the midstream business and is the more active of the two in the Marcellus/Utica Shale. However, NiSource with its Columbia Gas utility business is still an important user of Marcellus/Utica Shale gas–and therefore of interest to us. Yesterday NiSource issued their first quarter 2016 update. Being in the utility business ain’t a bad life. Pretty reliable income, even if it is regulated. In 1Q16 NiSource made $309.5 million before income taxes were paid, compared with $275.4 million in 1Q15 (a 12% increase). Below is the update for NiSource’s natgas and electric utility businesses…
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Dominion & NiSource Bow Down to Lord Obama, Worship the EPA

Yesterday the Environmental Protection Agency (EPA) unveiled the Natural Gas STAR Methane Challenge Program at the Global Methane Forum held in Washington, DC. The Methane Challenge is a “voluntary” program for obsequious companies to pretend they’re concerned about so-called fugitive methane escaping into the atmosphere and toasting Mom Earth. Silly, we know–but this is how some billion dollar companies gain favors from the political establishment–and improve their evil fossil fuel image with the nutjobs who believe in this stuff. Tragically, several Marcellus midstream companies, including Dominion, NiSource and UGI signed on to this flummery. There are 41 such companies from across the country who have signed on to the Methane Challenge (we list them all below). Prediction: It won’t be long before this “voluntary” program becomes involuntary–with the jackboots of the EPA on the necks of all oil and gas companies to get them to comply with the unrealistic standards in the program…
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Columbia Gas of PA Asks PUC for Permission to Raise Rates

Columbia Gas of Pennsylvania, a division of NiSource, has filed a request with the Pennsylvania Public Utility Commission (PUC) to raise rates so it can recuperate costs spent in upgrading its natural gas delivery system for customers. Columbia Gas has spent $1.1 billion from 2007 to 2015. However, they’re only asking for a mere $55 million rate increase…
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NiSource/Columbia Pipeline Divorce is Final

The NiSource/Columbia Pipeline Group are now officially divorced. Well, they call it a “separation,” but it’s really a divorce. Amicable, but permanent. Last September MDN brought you the news that NiSource, owner of Columbia Gas, would be spinning Columbia off into its own company in 2015 (see NiSource Splits in Two: Columbia Pipeline Will be Separate Company). NiSource the utility will remain focused on being a utility, and Columbia Gas will be spun off into it’s own company called Columbia Pipeline Group (CPG) under a master limited partnership (MLP) structure. As of yesterday the divorce is final and the two companies have gone their separate ways…
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Columbia Pipeline Floats IOUs to Pay Down Debt, Fund Dividend

NOTE: NiSource/Columbia called MDN to clarify that the IPO earlier this year was for Columbia Pipeline Partners, NOT Columbia Pipeline Group as we had incorrectly stated in the original version of this story. Thank you NiSource! We’ve slightly modified the opening paragraph below to make it accurate.

The mad dash to raise cash continues in both the upstream and midstream sectors. Today it’s a company in the midstream (pipelines and process plants). In February of this year, NiSource spun off Columbia Pipeline Partners into it’s own company with a $1.1 billion initial public offering of “units” (think shares of stock, see Columbia Pipeline IPO Blows By Rosiest Expectations, Nets $1.1B). Columbia Pipeline Group (of which Columbia Pipeline Partners owns 15.7%) will become its own company and trade under its own stock ticker (CPGX) starting July 1. Yesterday Columbia Pipeline Group announced they are floating a series of IOUs, or “senior notes” looking to raise an eye-popping $2.75 billion. What will they use it for? A little over $1 billion will be used to pay off “intercompany debt” ahead of the separation. Another $1.45 billion will be used for a “special dividend to NiSource in connection with its planned separation from NiSource.” The balance of ~$300 million will be used for “general corporate purposes”–paperclips and such…
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Columbia Pipeline IPO Blows By Rosiest Expectations, Nets $1.1B

Last week MDN told you that NiSource was launching an initial public offering (IPO) and spinning off its Columbia Pipeline Group subsidiary into its own subsidiary. NiSource and Columbia were hoping to raise upward of a huge $1 billion (see Columbia Pipeline Floats IPO, Hopes for Upward of $1B). Guess what? They got MORE than $1B! They ended up netting $1.1 billion after pricing units at $23 each (their target was $19-$21). When the units started to trade, they hit $28.01 per unit for a time before falling back to $26.79. How did Columbia’s IPO measure up with some other recent northeast midstream IPOs, like CONSOL, Rice Energy and Antero Resources?…
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Columbia Pipeline Floats IPO, Hopes for Upward of $1B

Last September NiSource announced they would spin off subsidiary Columbia Pipeline Group into its own company (see NiSource Splits in Two: Columbia Pipeline Will be Separate Company). It took a few months, but the two operations finally determined which executive would go with which company (see Who Gets the Kids in NiSource/Columbia Gas Divorce?). Earlier this week we finally learned the details of the initial public offering (IPO) for Columbia–how much money they plan to raise. NiSource said the IPO will float an initial 40 million “common units” (think shares of stock) with an option to add another 6 million to the pot. They hope to get between $19 and $21 per unit, meaning a total of between $760 million on the low side, to $966 million on the high side…
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Who Gets the Kids in NiSource/Columbia Gas Divorce?

At the end of September MDN brought you the news that NiSource, owner of Columbia Gas, will be spinning Columbia off into its own company in 2015 (see NiSource Splits in Two: Columbia Pipeline Will be Separate Company). NiSource the utility will remain focused on being a utility, and Columbia Gas will be spun off into it’s own company called Columbia Pipeline Group (CPG) under a master limited partnership (MLP) structure. It’s an amicable divorce. But you know, when people get divorced, they have to split everything–including the kids. Who gets the kids? NiSource and Columbia issued an announcement today detailing which executives will stay with NiSource, and which will go with Columbia–along with a list of who will sit on which board of directors…
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Hilcorp Begins Drilling the Brinker Field in Columbiana County, OH

Funny how old stories become new again. Back in September 2012 MDN first told you about the Brinker Storage Field, a 35,000-acre area in Columbiana County, OH used by Columbia Gas to store natural gas supplies in the Berea Sandstone formation. They’ve been storing gas in it for more than 50 years. The problem that we highlighted back in 2012 is that landowners, who signed leases to allow that storage, were going to get shafted out of royalties for leases Columbia had signed with Hilcorp to drill Utica Shale wells under the Brinker area (see Columbia Gas & Hilcorp Meet with Landowners in Brinker Field). A few months after a meeting with Columbia and Hilcorp reps, many landowners signed revised leases that cut them in on the action–with a 15% royalty (see Some Brinker Field (OH) Leases Revised, Others in Lawsuit). However, some landowners sued. It appears they lost since Hilcorp has filed for permits to begin active drilling in the Brinker. The Ohio Dept. of Natural Resources (ODNR) has already approved 6 of 25 permit applications from Hilcorp, and we expect the others will also be approved…
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Columbia Hits Resistance to Compressor Upgrade in SE PA

A year and a half ago MDN told you that Columbia Gas, a subsidiary of NiSource, was planning to upgrade a compressor station in Forks Township (Northampton County), PA (see Columbia’s SE PA Pipeline Project Includes Compressor Upgrade). The upgrade is part of Columbia’s East Side Expansion project, a project that includes 16 miles of new pipelines to carry cheap Marcellus Shale gas to a natural gas-powered electric generating plant (and other customers) across the border in New Jersey. Last year we reported that the neighbors of the project were just fine with the upgrade. Today, that’s changed, although how much opposition is yet to be fully determined…
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NiSource 3Q14: A Lot of Irons in the Fire, Spending Billions

NiSource, owner of the Columbia Pipeline Group (with lots of projects cooking in the northeast) issued its third quarter 2014 update yesterday. We have a fair bit of news in the release about their midstream activities in the Marcellus and Utica Shale region. They also update progress on their massive modernization project in replacing a lot of existing pipeline in the northeast–to the tune of $12-$15 billion over the next 10 years. The update highlights progress for the recently announced Leach and Rayne XPress projects, the WB XPress, Mountaineer XPress and the Washington County Gathering project. There’s a lot in there!…
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NiSource Splits in Two: Columbia Pipeline Will be Separate Company

Breaking Up is Not So Hard to DoNiSource is a very big public utility company (electric & gas) serving 3.8 million customers from the Gulf Coast through the Midwest to New England. Headquartered in Indiana, NiSource is also the parent of Columbia Gas, which owns extensive pipelines and recently announced they would build another two new pipelines in the Marcellus region (see Columbia Gas: $1.75B for 2 Projects to Send Marcellus Gas to Gulf). NiSource has decided and in an unusual move announced yesterday (Sunday) that they are splitting the company in two. NiSource the utility will remain focused on being a utility, and Columbia Gas will be spun off into it’s own company called Columbia Pipeline Group (CPG) under a master limited partnership (MLP) structure. MLPs issue “units” instead of shares of stock–although functionally they are about the same thing. Here’s the details from NiSource…
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