PITTSBURGH -- As the Marcellus and Utica shales have increased their importance to the U.S. natural gas and energy markets, so too has NiSource expanded its reach across the energy value chain.

“We serve high-value energy markets in 16 states with gas transmission, storage, processing and gathering services, including a large portion of the Marcellus and Utica shales,” Jim Avioli, director of commercial development for NiSource, said last month at Hart Energy’s Marcellus-Utica Midstream Conference in Pittsburgh.

Traditionally the company’s footprint in this region has been represented by Columbia Gas Transmission, Columbia Gulf Transmission and Millennium Pipeline through gas storage and transportation services. The company’s growth vehicle is through NiSource Midstream Services, which is adding gathering and processing services in the region.

The company is leveraging its strategic location and asset base to develop three gathering and processing projects in Marcellus-Utica plays at a total consideration of between $1 billion and $1.5 billion. This includes the Majorsville gathering system that is up and running along with the Big Pine gathering system in the last stages of development and the Hickory Bend gathering and processing system that has just initiated construction.

NiSource was an early mover in the Marcellus through the Majorsville system, located in Pennsylvania’s Washington and Greene counties and Marshall County, W. Va., that was placed in service in September 2010. It includes about 40 miles of high- and low-pressure gathering systems and five miles of residue pipeline that connects to the Columbia Gas and Texas Eastern systems.

“This year we’ll spend about $10 million to upgrade a compressor on the system to increase reliability,” he said. Among the customers on the Majorsville system that will benefit from this improved reliability include Chesapeake Energy, Statoil, Range Resources, Chevron, CONSOL Energy and Noble Energy.

The $150 million Big Pine system is set to be placed in service in March and will further increase NiSource’s foothold in the Marcellus by adding 57 miles of 20-inch to 24-inch gathering pipeline with access to the Columbia Gas, Dominion and Texas Eastern systems.

The pipeline originates in Butler County, Pa., and extends through Armstrong and Indiana counties and terminates in Westmoreland County. The main customer will be XTO Energy, which signed onto the project in March 2012. NiSource is in the process of adding other customers.

Avioli said that NiSource’s experience in the Marcellus is helping it gain an early foothold in the Utica shale. “There’s been a lot of activity from producers in the Utica, which has more than 2 million acres leased out, and we are also active in this area. Last July we announced a 50/50 midstream joint venture with Hilcorp Energy’s Harvest Pipeline in the Utica called Pennant Midstream. NiSource is the operator of Pennant and its first big project, the Hickory Bend gathering and processing complex, is located in Western Pennsylvania and Eastern Ohio.”

The complex will gather production from Mercer, Lawrence and Beaver counties in Pennsylvania and Trumbull, Mahoney and Columbia counties in Ohio. “Our plan is to lay 50 miles of 20-inch to 24-inch rich gas-gathering header, which will have a capacity of up to 800 million cubic feet (MMcf) per day,” he said.

The first phase of this project will cost $300 million and includes a 200 MMcf per day natural gas processing plant in Mahoney County, Ohio, that is expected to complete in December. In addition, NiSource is planning to build two more processing plants with capacity for up to 600 MMcf per day. The system will also connect to the Tennessee Gas Pipeline and Dominion East Ohio via a residue gas pipeline.

As the Marcellus and Utica shales increase production levels, there will be greater demand for transportation capacity. In order to help rectify this situation, Columbia Gas Transmission is undertaking a quick-link expansion project.

“The objective of this project is to transport residue gas from gas processing plants in Hickory Bend, Kensington and Harrison to multiple markets on the Columbia Gas and Texas Eastern systems,” Avioli said.

This project, which is currently in development, involves looping and extending existing pipelines to increase capacity for current shippers and Utica producers and has an in-service target date of the fourth quarter of 2015.

“NiSource has been in the Appalachian basin for decades and we intend to be there for many more,” he said.