NiSource Inc. (NYSE: NI) plans to file a registration statement for an initial public offering of common units representing limited partner interests in a new master limited partnership (MLP) to be named Columbia Pipeline Partners LP. The MLP's initial assets are expected to consist of a 14.6% interest in CPG OpCo LP, which will own substantially all of NiSource’s natural gas transmission, midstream, and storage assets.
NiSource expects the MLP to file a registration statement with the Securities and Exchange Commission (SEC) on Sept. 29. Subject to market conditions, an offering of common units in the MLP would follow registration with the SEC.
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.
On Sept. 28, NiSource announced that its board of directors has approved in principle plans to separate its natural gas pipeline and related businesses into a stand-alone publicly traded company. The transaction will result in two highly focused energy infrastructure companies: NiSource Inc., a fully regulated natural gas and electric utilities company, and Columbia Pipeline Group Inc. (CPG), a pure-play natural gas pipeline, midstream and storage company. The separation is expected to occur in mid-2015.
Under the separation plan, NiSource shareholders would retain their current shares of NiSource stock and receive a pro-rata dividend of shares of CPG stock in a transaction that is expected to be tax-free to NiSource and its shareholders. The actual number of CPG shares that would be distributed to NiSource shareholders will be determined prior to closing, which is expected to take place in mid-2015.
CPG, which is expected to be listed on the New York Stock Exchange (NYSE: COLP), will include Columbia Gas Transmission, Columbia Gulf Transmission, NiSource Midstream Services, and other current NiSource natural gas pipeline, storage and midstream holdings. In total, at separation the new public company will operate more than 15,000 miles of natural gas transmission pipelines, nearly 300 billion cubic feet of underground natural gas storage capacity, and a growing portfolio of midstream and related facilities.
The CPG system provides access to energy markets from the US Southeast through the Northeast, as well as strategic asset positions throughout the Marcellus and Utica shale regions. The company has leveraged these assets to develop a deep inventory of supply- and market-driven growth projects, many of which are in advanced stages of development.
Lazard is acting as lead financial advisor, and Sidley Austin LLP is serving as legal advisor, to NiSource on the transaction. Barclays and Citigroup are also acting as financial advisors to NiSource.