Dive Brief:

• NiSource, the owner of utilities serving northern Indiana, intends to split itself into two distinct businesses. One would be a fully regulated gas and electric utilities company, and the other a pure-play gas pipeline, midstream and storage company.
• The gas assets will go into a master limited partnership (MLP) that will use a favorable tax status to boost investment in shale gas. The spun-off company, now called Columbia Pipeline Partners LP, filed for an IPO with the SEC today, and the separation is expected to be completed by mid-2015.
• NiSource stressed that the transaction was not expected to impact employment levels, and its headquarters and office locations would remain unchanged. The transaction is expected to be tax-free for shareholders.

Dive Insight:

NiSource is touting the strategic benefits of the move, which will separate regulated utility companies NIPSCO and Columbia Gas from the midstream segment.

"As independent, highly focused, premier entities, both companies will benefit from the size and scale of their distinct assets and customer bases, will have enhanced strategic clarity and focus, and will be well capitalized," said NiSource President and CEO Robert Skaggs Jr. 

But it's more than just aligning business plans. Bloomberg points out that NiSource is only the most recent in a line of companies that have developed MLPs to expand their exposure to the shale gas boom. More than 280 such pipeline partnerships have gone public in the past 10 years, raising more than $80 billion from their IPOs. MLPs pay no federal income tax, allowing more money to be directed to investors. 

The IPO for Columbia Pipeline Partners LP is expected in the first quarter of 2015.