NiSource Inc., the parent company of Columbia Gas, announced on Tuesday that it intends to upgrade its Columbia Gas Transmission pipeline network in Ohio and other states.
It also announced preliminary success in its initial natural gas wells in the Utica shale in eastern Ohio and western Pennsylvania.
NiSource, based in Merrillville, Ind., will spend $1.8 billion through 2017 on pipeline improvements.
The pipeline system transports an average of 3 billion cubic feet per day of natural gas in 10 U.S. Northeastern, mid-Atlantic and Midwestern states.
The company will work on updating the infrastructure in states including Ohio, Kentucky, Maryland, Pennsylvania, Virginia and West Virginia, it said.
The company got federal approval in late January to pass those costs on to its customers.
The Utica test wells in Ohio and Pennsylvania are "quite encouraging," company president and CEO Robert C. Skaggs Jr. told investors.
He refused to provide specific flow data but said the wells were producing "high gas, about 1,200 Btu."
The wells are also producing significant volumes of natural gas liquids such as ethane, butane and propane, he said.
NiSource will continue its well testing and expects to drill 10 to 20 wells in the area later this year, he said.
NiSource and its partner, Hilcorp, have about 100,000 acres in and around the Youngstown area.
It also intends to build a new natural gas gathering system and processing plant through Pennant Midstream LLC.
The two companies have put $300 million toward that project.
The plan calls for 50 miles of pipelines plus a processing plant capable of processing 200 million cubic feet of natural gas per day before it is shipped into major pipelines for transportation.
The plant is due to be completed by the end of 2013.
An expansion of the Pennant Midstream’s project is projected to cost an additional $300 million.
Skaggs said NiSource had "another year of strong performance" in 2012.
The company reported earning $416.1 million or $1.39 per share in 2012 on revenue of $5.06 billion.
That compares to revenue of $299.1 million or $1.03 per share in 2011 on revenue of $5.97 billion.
For the fourth quarter of 2012, the company reported met income of $134 million or 43 cents per share on revenue of $1.4 billion. That’s up from net income of $14.6 million or 4 cents per share on revenue of $1.48 billion a year ago.
Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.
Rig Count Interactive Map by Baker Hughes, an energy services company.
Shale Sheet Fracking, a Youngstown Vindicator blog.
The Ohio Environmental Council, a statewide eco-group based in Columbus.
Earthjustice, a national eco-group.
People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.
Concerned Citizens of Medina County, a grass-roots group.
No Frack Ohio, a Columbus-based grass-roots group.
Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.
Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.
Allegheny Front, environmental public radio for Western Pennsylvania.