National Fuel Gas plans to spin off its upstream and gathering unit by 2027

what happened

The board of National Fuel Gas has signed off on a plan to carve out its Integrated Upstream and Gathering unit and list it as a separate, publicly traded company. Shareholders would receive stock in both businesses through a distribution structured to be tax-free. Completion is pencilled in for the second half of 2027, contingent on the Form 10 registration taking effect, financing terms and a final sign-off from the board.

After the separation, the remaining company would be a fully rate-regulated gas utility serving around 1.1 million customers, with roughly 5 Bcf/d of transport capacity and about 77 Bcf of storage. According to the Wall Street Journal, its pipeline and storage assets are located in Ohio, New York and Pennsylvania, and the company does not expect to need new equity over the next five years under its current capital plans.

The spun-off IUG would be a pure-play Appalachian producer and gatherer, holding about 1.2 million net acres, output of roughly 1.1 Bcf/d and around 5 Tcfe of proved reserves. According to a summary of the SEC filing, National Fuel plans to distribute at least 80.1% of IUG and keep up to 19.9%, which it intends to sell to strengthen its balance sheet. Shares of National Fuel were up 1.6% at $82.39 in premarket trading, per the Wall Street Journal.

why it matters

For investors, the deal would split a regulated utility from an Appalachian gas producer, allowing each business to be valued and financed on its own terms. Timing still depends on several conditions, so the schedule could shift before the 2027 target.

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