If you are like most people, you have never given a moment’s thought to how natural gas gets delivered to industrial, commercial and residential customers. Before the gas arrives at your stovetop, it has navigated a supply chain of specialist operators with different regulatory environments and different, often complicated issues. Generally speaking, to get from underground to warming water, gas goes via three distinct sectors:
The upstream natural gas production industry includes the exploration for and extraction of raw natural gas from petroleum reservoirs and, increasingly in Australia, coal seams. Processing facilities then turn the raw gas into pipeline quality for the domestic market or LNG for export.
Currently, NSW produces about 5% of the gas used by NSW customers. The rest of the gas used comes from other states, which brings us to…
The midstream gas transmission sector transports processed natural gas through high pressure pipelines from the processing facilities to the entry point to the distribution system (“city gate”) or sometimes directly to major manufacturing or power generation customers. Australia has about 25,000 kilometres of gas transmission pipelines.
The gas distribution and retail sectors are the downstream component of the gas supply industry. The gas distribution sector operates the lower pressure gas network that transports gas from city gates to homes, ofﬁces and factories. There are currently more than 80,000 kilometres of gas network pipelines in Australia.
The gas retail sector then sells the delivered gas to end use customers.
Cup of tea, anyone?