(WO) – National Fuel Gas Co.’s board has approved a plan to spin off the company’s integrated upstream and gathering business in Appalachia as an independent public company. After the separation, National Fuel will be a fully regulated natural gas utility and pipeline company. The tax-free spin-off is expected to be completed in the second half of 2027, through a distribution of at least 80.1% of the new company’s shares to National Fuel shareholders.
The upstream and gathering business holds about 1.2 million net acres in Appalachia, with net production of about 1.1 Bcf/d and about 5 Tcf of proved reserves. The company says it has more than 25 years of development inventory. Its wholly owned gathering system carries most of its production. The company says capital efficiency has improved about 25% since it moved development to its Eastern Development Area in 2023. Justin Loweth, president of Seneca Resources and NFG Midstream, will become CEO of the new company.
After the spin-off, National Fuel will have nearly $5 billion of rate base. Its utilities serve 1.1 million customers in Ohio, New York and Pennsylvania. Its FERC-regulated pipeline and storage business will provide nearly 5 Bcf/d of contracted transportation capacity and 77 Bcf of storage. The company pointed to growing gas demand from data centers and power generation as a driver for new pipeline and storage infrastructure. David Bauer will remain president and CEO.
“Following the recent closing of our Ohio gas utility acquisition, each business is now a scaled platform, and post-separation, is expected to have the financial strength to best capitalize on the long-term growth opportunities as independent companies,” Bauer said.
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