HOW IT WORKS
How Do US Natural Gas Pipelines Move Gas to Markets?

A massive transmission and distribution system, the natural gas pipeline network in the United States is comprised of more than 210 pipeline systems spanning 305,000 miles that can deliver to virtually anywhere in the Continental US.

U.S. Natural Gas Pipeline Network, 2009
U.S. Natural Gas Pipeline Network, 2009Source: www.eia.doe.gov

These pipelines have more than 11,000 delivery points, 5,000 receipt points and 1,400 interconnection points that transfer natural gas throughout the country, as well as 24 hubs that offer additional interconnections. Ensuring a constant flow, there is a network of 1,400 compressor stations that maintain the pressure in the lines.

Importing LNG domestically, natural gas via pipeline from Canada, as well as exporting natural gas to Mexico, there are 49 locations where natural gas can be imported or exported into the US. Additionally, there are eight LNG import facilities and 100 LNG peaking facilities. There are 400 underground natural gas storage facilities, as well.

Regulations

The Federal Energy Regulatory Commission (FERC) defines the rate-setting methods for interstate pipeline companies, as well as determines rules of business. Furthermore, the governmental agency is solely responsible for authorizing the construction and operations of interstate pipelines, storage fields and LNG facilities.

Should a company plan to develop a new or expand an existing pipeline, there are a number of steps that must be undertaken, including obtaining regulatory approval from FERC. The company must publicly announce the project, in addition to constructing and testing the pipeline. On average, it takes approximately three years to bring a pipe into service from the time it is first announced.

On the other hand, there remain major pipeline projects that take substantially more time than that to construct and put into service. For example, it will take a number of years for BP and Conoco Phillips to build the Denali Alaska gas pipeline currently under review. Another ongoing pipeline construction project is Transcanada's Bison pipeline, which will link Wyoming natural gas with Midwest US markets.

Transporting Natural Gas

There are a number of transfer and processing steps involved with getting produced natural gas from the wellhead to the customer. Once leaving the well from which it was produced, natural gas is directed via gathering lines, which transfer the flow to a processing plant.

After being processed at the plant, natural gas is transmitted via a mainline transmission system, which is a wide-diameter pipeline that transports the gas for long distances to the market areas. Market hubs are where these pipelines intersect and flows are transferred. Natural gas can either be transported to the final customer or to underground storage facilities for later use.

There are 11 unique transportation routes within the US. Those include five transmission lines originating in the producing areas of the Southwest US, two pipelines that extend from the Rocky Mountain region and four routes that enter the country from Canada.

Regional Delivery

The US is divided into six regions that encompass the lower 48 states. The Northeast region includes Connecticut, Delaware, Massachusetts, Maine, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia and West Virginia. With 20 interstate natural gas pipeline systems, there are 50 local distribution companies in this region.

Composed of Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin, the Midwest region is served by 26 interstate and eight intrastate pipeline companies. This region gathers much of its supply from Texas and Oklahoma, but production is also provided by Canada, and a new pipeline, the Rockies Express, originating in the Rocky Mountains will also add production by the close of 2009.

Made up of Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee, the Southeast region is served by 23 interstate and eight intrastate pipeline systems. A large majority of the gas supplied here comes from the Gulf of Mexico, Texas and Louisiana.

Serving principally as an exporter to other regions in the US and Mexico, the Southwest region provides natural gas from both onshore and offshore production sites. Consisting of Arkansas, Louisiana, New Mexico, Oklahoma and Texas, the Southwest region houses some of the oldest and largest pipeline systems in the US. The region contains more than 56,000 miles of natural gas pipeline and more than 66 intrastate systems.

Colorado, Iowa, Kansas, Missouri, Montana, Nebraska, North Dakota, South Dakota, Utah and Wyoming are served by the Central region. Here there are 22 interstate and 13 intrastate pipeline companies. Because this area consumes less than it produces, it is an exporter; supplies are also transported through the region from the south and east, as well as from Canada to the north.

With 10 interstate and nine intrastate natural gas pipeline systems, the Western region consists of Arizona, California, Idaho, Nevada, Oregon and Washington. About half of the supplies entering the region are from domestic origins, and the other half comes from Canada.

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