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  • Gas

  • A distribution crew working on an underground governor.The gas industry connects producers, processors, storage, transmission and distribution network operators, as well as suppliers to industrial, commercial and domestic users.

    Production and Importation

    Gas used in the UK is sourced from gas fields in the North and Irish seas, piped from Europe and imported as LNG. Small amounts are produced onshore. There are seven gas reception terminals, three LNG importation terminals and three
    interconnectors connecting Great Britain via undersea pipes with Ireland, Belgium and the Netherlands. LNG importers bring LNG from the Middle East, the Americas and other places.

    Gas is produced in the US Gulf Coast, midcontinent, Western Rockies, Alberta, eastern shale supplies and other unconventional sources in North America. We do not produce gas in either the UK or US.

    In the UK, we own and operate an LNG importation terminal and storage facilities at the Isle of Grain in Kent (Grain LNG). Grain LNG charges customers under long-term contracts for various services, including access to our importation terminal, storage facilities and capacity rights.

    In the US, we own and operate LNG storage and vaporisation facilities to support our gas distribution businesses as well as an LNG storage facility in Providence, Rhode Island, where we store gas for third parties for a fee. We also buy gas directly from producers and LNG importers for resale to our customers.

    Transmission

    The transmission systems generally include pipes, compressor stations and storage facilities, including LNG storage. They connect production through terminals to the distribution systems.

    In the UK, gas enters the transmission system through importation and reception terminals and interconnectors and may include gas previously extracted and held in storage. Compressor stations located along the network play a vital role in keeping large quantities of gas flowing through the system, particularly at times of high demand. The gas transmission system has to be kept constantly in balance, which is achieved by buying, selling and using stored gas. This means that, under normal circumstances, demand can be met.

    We are the sole owner and operator of gas transmission infrastructure in Great Britain.

    In the US, we hold a minority interest in two interstate pipelines: Millennium Pipeline Company and Iroquois Gas Transmission System. Interstate pipelines are regulated by FERC.

    Distribution

    Until 31 March 2017 we owned and operated four gas distribution networks comprising approximately 131,000 kilometres (81,400 miles) of pipeline, transporting gas from the NTS to around 10.9 million consumers on behalf of 41 gas shippers.

    As announced on 31 March 2017, a 61% equity interest in this business was sold to a consortium of investors. The Consortium comprises Macquarie Infrastructure and Real Assets, Allianz Capital Partners,Hermes Investment Management, CIC Capital Corporation, Qatar Investment Authority, Dalmore Capital and Amber Infrastructure Limited/International Public Partnerships. National Grid has retained a 39% equity interest in the new separate business.

    In the US, gas is delivered by the interstate pipeline companies to local distribution networks. Each local distribution company has a geographically defined service territory and is the only local distribution company within that territory. Local distribution companies are regulated by the relevant local state’s utility commission. Our US gas distribution networks deliver gas to around 3.5 million customers.

     Gas distribution areas

    Supply

    Pipeline shippers bring gas from producers to suppliers, who in turn sell it to customers. We do not supply gas in the UK. However, we own National Grid Metering, which provides meters and metering services to supply companies,
    under contract.

    In the UK, customers pay the supplier for the cost of gas and for getting it to them. We transport the gas through our network on behalf of shippers, who pay us transportation charges.

    In the US, gas distribution companies, including National Grid, sell gas to consumers connected to their distribution systems. In most cases in the US, where customers choose National Grid, they pay us for distribution and gas costs. Where they choose to buy gas from third parties, they pay us for distribution only and pay the third party supplier for the gas and upstream transportation capacity.

    Also in the US, except for residential consumers in Rhode Island, customers may purchase their supply from independent providers with the option of billing for those purchases to be provided by us.